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Home Inspection and Purchase & Sale Agreement

My offer has been accepted, now what is the next step?

What to Look for in a Purchase & Sale Agreement

Congratulations on your offer being accepted. The next step is scheduling your home inspection. You will also want to speak with your attorney and let them know the offer has been accepted and send them a copy of the offer. Your attorney will communicate with the seller’s attorney to get a draft of the purchase and sale agreement which is usually drafted by the seller’s attorney or by the listing agent’s office.

The purchase and sale agreement is a standard contract used for the sale of real estate. Every attorney or real estate agent have these contracts in their computer which simply require the transfer of the terms from the offer to the contract. The attorney will carefully review all the terms of the contract because even though they are standard there can be different versions used by various attorneys and agents. If you are purchasing a condominium the attorney will review the condominium documents and budget if available. It is important for the buyer of a condominium to review the condominium documents as well since they are the rules and regulations of the condominium which you will want to be aware of.

Reviewing the contract

You will also have a chance to review the contract and this will be the time to ask questions about any terms you do not understand. The contract can be confusing because it tries to cover many different circumstances and not all of the terms will apply to your purchase.

The purchase and sale agreement is also where you put anything that was found in the inspection which you want to be addressed by the seller before the closing. Of course inspection issues have to be negotiated with the seller. The seller may only agree to fix some of the inspection issues or none at all, at that point you decide whether you still want to purchase the home. You can also negotiate that the seller reduce the price or give a credit at closing to compensate you for the inspection issues rather than the seller doing the repair. When it comes to inspection issues, there is no right or wrong way to have them addressed, it simply comes down to negotiation between you and the seller and what you both feel comfortable with.

There will be a paragraph in the contract for your mortgage contingency. This paragraph protects the buyer in case they do not qualify for a mortgage. It will contain the amount of the mortgage you are applying for, and a date for you to obtain a commitment letter. This letter is your lender stating that you have been approved for this loan subject to final verifications, it is not the same as a pre-approval letter which you may have received prior to looking at homes. If you do not have a commitment letter by the date stated in the contract then you can terminate the contract and get your deposit back. If for some reason you went past that date without a commitment and you do not get the loan then the seller can keep your deposit. 

Signing the contract

Once the terms of the purchase and sale agreement have been agreed upon by all parties the contract is put in final form for signatures. It is not necessary to have a meeting with the sellers or your attorney for the signing of the contract. Normally your agent will meet with you and have multiple copies of the contract signed and collect the deposit check from you, certified check is normally preferred any question on the type of check and who to make it payable to can be directed to your attorney, also be sure to make a copy of the check so you can give it to your lender. Then your agent will bring the contracts to the listing agent and the sellers will sign. You will need to get a fully executed contract to your lender as soon as possible.

 

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Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice.  You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail.  Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

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