THE CONTRACT: YOUR ROAD MAP TO A SMOOTH CLOSING.
When you find the house you want to call home, we will research the comparable sold data (the “comps”) and present that information to you so that you can make an informed decision about what you would like to pay for the property. You may not offer what you are willing to pay at first – that’s what negotiations are for.
Offers are made by filling out and submitting a contract. We have copies of the promulgated forms that must be used by all REALTORS® in Texas and will help you fill in all the blanks. Each offer situation is different, and we can offer you advice and opinions about the terms that will work best in each case. If you do not understand these forms, or are uncomfortable with them, you should consult an attorney.
The contract isn’t finalized until all parties agree to all the terms in writing. Sometimes contract negotiations go very quickly – with the first offer being accepted. Other times it doesn’t go quite so smoothly. It’s a good idea to decide ahead of time how much you are really willing to pay and stick to that decision.
There are three things you will have to provide along with a contractual offer:
|
- Earnest Money. Usually 1% of the offer price. This indicates to the seller that you are a serious buyer. The check will be cashed by the Title Company and held in escrow to be applied to the purchase price or closing costs if/when the closing takes place. If the closing does not take place (and you have not defaulted on the contract) this money will be returned to you
- Option Fee. Usually 10% of the Earnest Money. This is used to pay for an “Option Period” during which you can hire an inspector to thoroughly go over the property and find problems with it. More about this later…
- A Pre-Approval letter from your lender.
|
CONTINGENCIES: THE NITTY, THE GRITTY, THE NECESSARY.
Remember that the contract has many provisions in it that protect you, the buyer. These can be looked at as “contingencies” that must be met.
|
- Home inspection. If you are not satisfied with the home’s inspection report, this clause lets you opt out of the contract.
- Financing contingency. This makes the deal dependent on your receiving the mortgage you’re applying for, specifying cancellation rights and return of earnest money deposit if you can’t arrange adequate or acceptable financing.
- Clear title. You want a clear and marketable title to the property. If there are title defects or problems found with the survey, you can withdraw from the deal.
- HOA contingency. If the property belongs to an HOA, you will have time to review the documents that govern the HOA and withdraw from the contract if those conditions are unacceptable to you.
- Home sale contingency. Allows a specific timeframe for you to sell your current home.
|
|