Understanding Home Purchase Agreement

Home Purchase in LittletonFinally, you found your dream house!

After going through several negotiations, you’re finally ready to purchase and sign the contract to close the deal. But do you fully understand all the details stated in the contract? Before signing, it’s essential to understand the conditions and provisions stated in the contract.

And, to understand purchase agreements, Real estate attorneys like m-s-lawyers.com recommends discussing the contract details with your broker point by point. You need to know what you’re getting. A thorough discussion with the real estate professional will eliminate possible misunderstandings.

“…Real estate professionals and others who make commercial communications to consumers about mortgage credit products are prohibited from making misrepresentations about the products and also must keep records of their communications for two years. “Commercial communications” applies to oral and written statements… (source: National Association of Realtors)

What Should A Typical Home Purchase Contract Include?

A home purchase contract should include:

  • Mortgage contingency provision. This provision releases you from the offer in case you’re unable to get a loan in a particular amount and interest rate within a given period. This is usually between 1-2 months.
  • Purchase price you’re offering
  • Legal description and the address of the property.
  • A down payment or earnest money if you’re to repay the remainder in installment
  • The amount of time the offer will remain open
  • Closing date of the sale
  • Items included during the sale
  • Inspection contingency clause, which allows you to have the house inspected a few days after contract signing.
  • A clause that requires cancelling the deal if the sale isn’t completed arising from some conditions not complied with.

Going through your home purchase agreement is essential. Buying your home is a lifetime investment and understanding every detail will help you avoid costly mistakes.