A home purchase is one of the largest transactions most individuals will ever enter into. That’s why it is helpful to understand some topics that should be addressed in a real estate contract.
Financing and costs
Most people are not able to purchase a home in cash. Instead, they take out a mortgage with a lender to pay for the home. It’s very important to understand the financing terms, including the interest rate and the length of the loan. Many mortgages are payable over 10, 15, 20 or even 30 years so buyers need to know that they can make the payments in full and on time.
The contract should also specifically state which party is responsible for each cost in the transaction. These may include escrow fees, a fee for the title search, notary fees and any other expenses.
Home inspection and closing
Some buyers want to pass on a home inspection but this may be a mistake. The home inspection can reveal repairs that are required to make the home safe and how much they will cost. The buyer should be aware of whether the contract for sale allows him or her to walk away from the purchase if there is a problem uncovered in a home inspection.
The contract should also specify the closing date and include any buyer contingencies, such as needing to sell their existing home before purchasing the new home.
It’s important that real estate transactions are completed accurately and an experienced attorney can help buyers who have questions.