If you’re ready to buy but want to have peace of mind when your name is signed to the contract, here are specific parts to carefully review.
Name on the Contract
In order for a contract to be valid, it must have the correct name on the contract. This may seem obvious to some but if your legal name is different from what you’ve provided your realtor, then it is possible that the wrong name was included on the contract. When reviewing the contract, make sure that the name is spelled exactly as it appears on your social security card.
The response deadline is the deadline that you need to review the contract and sign it by. If you miss this deadline, then the entire purchase process either gets terminated or starts over from the beginning.
For this reason, it is incredibly important that you review this date and either sign the contract by then or request an extension. If you intend on using an extension, work with your realtor to make sure everything is done properly.
Mortgage Contingency Provision
Before you ever sign a contract, make sure it has a mortgage contingency provision that will release you from the contract if needed.
With this provision included in the contract, it means you could be released if you are unable within 30-60 days to obtain a loan for a specific amount by a certain deadline.
Amount of Your Down Payment
Since it is highly unlikely you paid cash for your new home, always review your contract to ensure it has the correct amount of your down payment. If it doesn’t and you sign anyway, you could be on the hook for far more money than you anticipated.
The Closing Date
If you have discussed conveyancing during your real estate transaction, you should also look over your home contract to see if it contains the correct closing date, which is the date when the sale of the home will be finalized and meet all legal requirements for you to take ownership. If this date is not included or it is different than what you expected, never sign the contract until this issue is resolved.
Items Included in the Sale
When many homes are sold, items other than the home itself are often included in the sale. The most common items include appliances, light fixtures, carpeting, and so forth. In your home contract, there should be a clause stating precisely which additional items are to be included in the sale.
Also, your contract may have a clause stating what is not to be included in the sale. Whether both of these areas are merged into one clause or are kept separate, don’t sign until you are satisfied with the terms.
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Inspection Contingency Clause
Extremely important, the inspection contingency clause gives you the right to have a professional inspector examine your home within a week or so after you sign the contract. By including this clause, you will make your offer contingent upon the home receiving a satisfactory report from the inspector.
Even if you are well versed in reality law and a lawyer’s language, it can be really helpful to have an expert look at it. For example, someone that does conveyancing for reality contracts would know exactly what to look for when reviewing a contract.
If you reach out to a local, they may be willing to review the contract for you for a small fee. Once you and a professional have looked over these and other important clauses in your home contract, you can sign on the dotted line and have peace of mind when doing so.
Image Credit: specific parts of a home contract by envato.com
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