WRITING OR READING A CONTRACT
The purpose of my web site is to give you the tools you need to do the job right and assure you and your family as much money from the sale as possible with the least amount of mistakes, exposure and heartache. . . Remember, I am not an attorney so I am in no way giving you legal advice. When it comes to the contract and disclosures for your area you need to run it by the attorney you have selected to prepare your deed and handle your end of the closing. However, I will be going over contracts and disclosures and giving you some good resources to use as guidelines. Do not assume a contract or disclosure statement is ok even if it came from a legal forms site on the internet, always have them looked over by your attorney.
MAKE SURE YOU LET YOUR ATTORNEY REVIEW the CONTRACT AND DISCLOSURE PKG FOR YOU. YOU DO NOT WANT TO EXPOSE YOURSELF TO A LAWSUIT BY NOT INCLUDING SOMETHING IN THE CONTRACT OR DISCLOSURE. YOU DO NOT WANT TO TIE UP YOUR INTERESTS IN YOUR HOUSE IN A CONTRACT THAT MAY NOT BE ENFORCEABLE!!!
Do you need a Sales Contract?
LET’S EXAMINE WHAT IS IN A REAL ESTATE SALES CONTRACT…
All real estate sales contracts can be divided into a number of general parts. Although each form of the contract will contain these divisions, their location within a particular contract may be different. The following items are information that is generally required to be included in the contract:
√ The full legal name(s) of the seller as they apear on the Deed (all owners must be included in the contract process) and there will be a statement of the type of deed the seller agrees to give, including the covenants, conditions and restrictions to which the deed will be subject.
√ The full legal name(s) of the Buyer including the statement of the buyer’s obligation to purchse the property, and the details of how the buyer intends to take title to the property. (including type of Deed)
√ The full legal legal description which usually includes the lot number, subdivision, city/county/township of the property being purchased including if there is one the street address.
√ The full amount of the purchase price of the property and the terms by which the buyer intends to pay for the property, the amount of Earnest money deposit (which must be paid and attached to the contract at time of submission to seller for acceptance and will at closing be applied to the buyer’s closing costs, unless there is a breech of contract and then there should be a clause as to what happens to the earnest money. Is it returned to buyer or forfeited. Included too is the amount the buyer will be paying as a down payment and the conditions of any mortgage financing the buyer intends to obtain or assume.
√ The provision for the closing date of the transaction and the transfer of possession of the property to the buyer. Also, the name of the attorney or closing agent that the buyer will be using for their closing.
TIP east of the Mississippi usually uses attorneys and west of the Mississippi uses closing agents/title offices.
√ The provision for the title eveidence (asbstract and legal opinion certificate of title, Torrens certificate, title insurance policy) to be provided at closing.
√ The provision for the proration of (adjustment for days of month used by seller) real estate taxes, hazard insurance, rents, fuel (remaining oil in underground tank, propane, etc.) and the like.
√ The provision for the proration of (adjustment for days of month used by seller) real estate taxes, hazard insurance, rents, fuel (remaining oil in underground tank, propane, etc.) and the like. This is usually based on a 30 day month. Because of this proration if a buyer to closes at the end of the month they have less closing costs but their first payment is due sooner.
√ The provisions for the completion of the contract in the event that the property is damaged or destroyed between signing of the contract and the closing of the transaction on the property. You must consider a natural disaster or a fire or other damages which may occur.
√The provision for remedies available should either party default on the contract (including liquidated damages, the right to sue, etc… consider arbitration, disposition of earnest money, down payment.)
√The contingency in the event that a property must be sold by the buyer or the seller before sale can be closed.
√The dated signatures of all parties to the contract. (all owners must sign) (the signature of a witness is not essential to a valid contract)
ADDITIONAL PROVISIONS
√ The description and listing of any personal property to be left with the property for the buyer (such a major appliances, lawn and garden equipment, etc.) remember if any question about an item being a fixture or personal property, write it in the contract if it stays if it goes)
√The identification of any real property to be removed by the seller prior to the closing (such as a storage/tool shed, car port, play equipment, light fixtures, shelves, etc.) should be spelled out in the contract and marked with a tag or in the case of trees and shrubs a brightly colored ribbon. Again spell out in the contract items which will be removed.
√ The transfer of any applicable warranties on items such as heating and cooling systems, built-in appliances, etc. Home Warranty policies are excellent protection for both the seller and the buyer if there is any doubt at all to condition of a system. Either buyer or seller can pay for this policy. Include provision as to who will pay for this and what company will provide this coverage in the contract.
√The identification of any leased equipment that must be transferred to the buyer or returned to the lessor (such property as security systems, cable television boxes, water softeners, etc.)
√ The Name of the closing or settlement agent.
√ The transfer of any impound or escrow account funds.
√ The transfer of the hazard insurance policy or the issuance of a new policy.
√ The transfer or payment of any outstanding special assessments or liens.
WARNING!
THERE IS NEVER TOO MUCH INFORMATION IN A CONTRACT!
DO NOT ASSUME
SOMETHING WILL BE AS DISCUSSED!
IF IT IS NOT IN WRITING IN THE CONTRACT THEN IT IS NOT PART OF THE AGREEMENT OF SALE AND CANNOT BE ENFORCED!
MAKE SURE EVERONE INITALS ALL CHANGES ON EVERY PAGE OF THE CONTRACT
NO EXCEPTION!
HERE ARE SOME PROVISIONS YOU MAY WANT TO CONSIDER TO BE IN YOUR CONTRACT OR THAT MAY BE ADDED BY THE BUYER:
· Including a deadline for the buyer to secure a specific type of loan in a specific amount of time. (remember VA loans cost you money as there are points to be paid)
· Including the provision that the contract can be voided by the buyer if the property appraises for less than the contracted sales price. The provision that the contract can be voided by the seller if the property appraises for more than the contracted sales price.
· Including the buyer’s right to a satisfactory structural engineering report, pest/insect infestation report or habitability report, and/or a whole house inspection within a specified few days of contract’s acceptance.
· Including provision to allow the buyer’s right to inspect the property shortly before the closing or settlement, usually the day before or day of. (often called the walk through)
· Including provision to allow the buyer’s or seller’s right to have a family member or an attorney approve the terms of the contract within a specified few days.
· The agreement as to what documents will be provided by each party and when and where they will be delivered.
· Including provision of the buyer’s right to sell a presently owned home before having to close on this property under this contract; the seller’s right to purchase a new home before having to close on this property under this contract. A contingency clause.
YOU NEED TO KNOW THE DIFFERENCE BETWEEN A FIXTURE OR AN ITEM OF PERSONAL PROPERTY ! The following lists give you an idea of what to expect the buyer to think are fixtures and personal property. However this is not an absolute which is why it is important to write out in the contract what will stay and what you the seller will be taking when you move.
The following is a list of items usually considered by the Buyer to be Fixtures :
· Storage or tool shed affixed to the ground.
· Plumbing units such as tubs, sinks, commodes, shower stalls, plus appurtenant pipes and faucet fixtures.
· Curtain rods, medicine chests, cabinets hung on wall, mirrors and vanities affixed to the wall.
· Window blinds, shades, shutters.
· Wall-to-wall carpeting installed over unfinished concrete or wood sub-floor or where the wall-to-wall carpeting is annexed to the flooring in such a way that the removal of the carpeting would create the need for repair to the underlying floor.
· Electrical wiring, light fixtures, chandeliers, ceiling fans, wall sconces and switches.
· Linoleum, laminate flooring and other composite floor coverings.
· Water heater, furnaces and heat pumps.
· Free standing wood stoves or fireplaces.
· Water softeners and filters.
· Storm doors and windows, screens and screen doors.
· Central vacuum system.
· Central air conditioning system; air conditioners in windows which are braced with brackets screwed into wall inside or out, air conditioners units for which the wall opening has been made.
· Built in trash compactors.
· Under the counter built in dishwashers.
· In-sink garbage disposal units.
· Ranges and stoves especially if drop-in or built in (usually even a free standing range stays as a fixture).
· Microwave Oven (if installed).
· Shelves that have been attached to the wall.
· Cabinets that have been attached to the wall.
· Racks for hanging things if attached to the wall.
· Landscaping shrubs, flowers, trees, lantern hangers, walkway lights, water features.
Rule of thumb: If there is any question that you want to take something with you and you are not sure if it is a fixture or personal property just include it in the contract as something you are taking with you and there is no problem. This applies to shrubs, trees and flowers as some people want to take that special rose bush with them.
The Following is a list of Items which are considered by the Buyer to be PERSONAL PROPERTY:
· Refrigerator, freezer
· Washer and dryer
· Rugs, room size carpets (not installed)
· Furniture and drapes/curtains
Counter top Appliances (not installed)
TAKE A LOOK AT:
SAMPLES OF WORDING
FOR CONTRACT CLAUSES in E-BOOK
Copyright© 1973,1978,1981,1996,1998,1999,2003,2005, AEBlake
Copyright© Oct 1, 2009 forsalebyownerhow2 abef Blake Enterprises
Information deemed to be reliable although not guaranteed
THANK YOU FOR VISITING!
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