Buying a house is an exciting, and stressful, time. After all, buying a house is likely to be one of the biggest, if not the biggest, purchase a person will make during their lifetime. Make sure you are protecting yourself throughout the process as missteps during home buying can have big and lasting implications. For starters, we are going to go through some key real estate contract provisions you should pay attention to when buying a house.
Pay Attention to these Real Estate Contract Provisions When Buying a House
There will be a great deal of paperwork coming your way after you make a formal offer on a house for sale. As with most contracts, your real estate contract is likely to contain provisions, referred to as “contingencies,” to which you should pay close attention before making any kind of contractual commitment. While the purchase price will, of course, be a key provision of the contract, there are many more that are well worth your time to review.
For instance, the contract terms relating to financing your purchase of the property are essential to review. After all, most people do not have enough cash on hand to buy a home outright. As such, most will need to secure financing by taking out a mortgage. You should do your research regarding what kinds of interest rates are currently available. Furthermore, you should consider a contract provision which makes your purchase offer contingent on your ability to obtain financing at a certain interest rate.
Be sure to also review the contract terms regarding closing costs. You can ask the seller to cover closing costs, in whole or in part, in the contract. A seller assist provision in the contract will act like a credit wear the seller is agreeing to absorb some of the closings costs that the buyer is most commonly required to cover. In the contract, you can specify what costs you will cover and what costs the seller will cover. Closing costs will often include common fees related to the purchase of the home such as:
- Escrow fees
- Title insurance
- Recording fees
- Transfer tax
- Notary fees
As a buyer, a home inspection contract provision will also be very important. Even when a property looks well maintained, serious problems can lurk underneath. A home inspection clause can provide that you are permitted to walk away from the purchase deal if a home inspection shows significant flaws to the property.
You should also consider paying attention to clauses pertaining to the fixtures and appliances in the home. If you want any of the fixtures or appliances to be included in the property purchase, make sure this is specified in the real estate contract. Verbal agreements can be unreliable. It is also important not to assume anything is included in the purchase. Specifically, state such in the contract itself.