the names of the seller, buyer, and any agents involved in the transaction,
the property that is being sold,
the purchase price and method(s) of payment along with time limits for payment.
THE SALES AGREEMENT
The document used when making the offer becomes a binding sales agreement when both the seller and the buyer have signed it. It is advisable that you DO NOT sign the sales agreement until your lawyer has reviewed it, because ONCE IT IS SIGNED IT CANNOT BE CHANGED.
This includes:
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the names of the seller, buyer, and any agents involved in the transaction, |
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the property that is being sold, |
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the purchase price and method(s) of payment along with time limits for payment. |
This includes:
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- a list of what fixtures, appliances, and personal property are to be included or excluded in the sale, |
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- the date for taking occupancy of the property, |
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- an agreement that the grounds and the home's interior will be cleaned and rubbish and debris removed before you take possession. |
Contingencies are clauses in the document that make the agreement specifically dependent on certain requirements being satisfactorily met.
This contingency indicates that the agreement is dependent on your ability to obtain a mortgage, or other form of financing within a given time period. If this does not occur and both parties agree, the time to obtain financing may be extended. If not, the agreement may be terminated in writing.
Inspections are required for your protection, so that you do not discover problems with the property after it is too late to remedy prior to closing. Usually you are required to pay for these inspections. These costs are included in "the good faith estimate of closing costs" you receive from the lending institution.
The sales agreement is dependent on certain inspections being satisfactorily performed. If they are not, the agreement can be terminated in writing or the selling price can be renegotiated.
pest infestation inspection
This inspection states that the house is free of termites, beetles, or carpenter ants, and reveals any damage done by such insects. If infestation or damage is discovered, the agreement may be terminated or the seller may be required to remedy or fix the problem. This is always dependent on the way the agreement is worded. Estimated Cost: $30 - $60.
home inspection
This is a detailed inspection of the entire house stating that the house is structurally sound, and that the plumbing, heating and electrical systems, windows, roof, siding, doors, and appliances are in working condition. It is a good idea to accompany the inspector at the time of the inspection, so that you can ask questions and learn more about any possible problems. Whether you or the seller are required to fix any problems that exist depends upon the wording of the sales agreement. Estimated Cost: $300.
Many home inspectors will also do lead paint or radon tests at the time of the home inspection for an additional charge. If the inspector you have chosen does not do these tests, they will more than likely be able to refer you to someone who does. Having one inspector complete all of the tests is the most ideal situation.
residential lead-based paint hazard risk assessment
In homes built before 1978, lead paint was often used. Lead-paint can have very serious health consequences for young children, and pregnant women. In most cases, you have 10 days from the signing of the sales agreement to have a lead-based paint hazard inspection done. If there is a hazard, the seller must take corrective measures or the agreement is terminated. Estimated Cost: varies.
radon testing
Radon is a naturally occurring, odorless gas that can cause major health problems if present in the home. The seller must notify the buyer if radon is present in the house. If the seller does not know, a test can be done by you or a professional. If there is more than a specific pre-determined amount of radon in the home, the party responsible for correcting it will be designated in the agreement. If it is not corrected, the sales agreement is terminated. Estimated Cost: $35 (if you do it yourself) - $100 (for a professional).
In some cases, additional testing should be done for asbestos, formaldehyde, and hazardous waste, all of which can be hazardous if not corrected.
The lender will require an appraisal of the market value of the home. If the appraisal value of the home is lower than the purchase price, the lending institution will not approve the full loan amount. The lender may approve a loan for up to the appraised value of the home. This contingency will allow you to withdraw your offer if the appraisal is not at least as much as the loan amount. Estimated Cost: $200 - $300.
The lender will also require a title search to establish that the seller does indeed have legal ownership of the property. This contingency will allow you to terminate the sale if there is a problem with the title of the property. Estimated Cost: varies.
A property survey determines the boundaries of the property. It is a good idea to have this done whether or not the lender requires it. Not all surveyors use visible markers to designate the property boundaries. A drawing of the property is acceptable. A staked survey with visible markers is also acceptable, but more expensive. You may be able to locate a recent survey. If it will be accepted by the lender, it will save you the cost of having a new one done. Estimated Cost: $250 - $400.