Once your house is on the market, at some point you will hopefully receive an offer to purchase. Real estate deals can be complicated and the “legalize” can sometimes be confusing and even misleading. So it’s a good idea to have your attorney look over any contract that is developed before you sign on the dotted line.
An important first step is to look at the contract as a whole. Because it comes from a prospective buyer of your house, it may well be slanted in the buyer’s favor. If you’re using a real estate agent, ask them for their advice. If not, be sure to have your attorney give you his or her opinion in regarding to bias in the contract.
There are key elements of any sales contract that need to be examined.
- Prices and terms. Don’t get upset if you get a low offer. This is simply an open door to begin negotiations. Be realistic, however. Is your home overpriced? If so, be willing to negotiate. By looking at the price and terms being offered, you can determine which is most important to your buyer and thus be better positioned to negotiate.
- Inspections and warranties. It is the responsibility of the buyer to have an inspection done if he or she wants to be assured of the sound condition of the house. Be careful what you say or what you agree to in regard to building condition. The basement may have never leaked before, but that doesn’t mean it couldn’t in the future. Make no guarantees you’re not willing to back up.
- Response deadlines. The offer will have a deadline for you to respond to it. Don’t rush into any deal, especially if you’re in a hot seller’s market. Get as much time as you can to respond. You may get a better offer and be able to use it for negotiation purposes.
- Settlement and occupancy dates. Be reasonable, but don’t be pushed. A normal time for closing and turning over of the keys is from 30 to 60 days from acceptance of the offer. In some cases, if there is a valid reason, the time can be shorter, but there’s a lot of paperwork to take care before these dates come up.
- Finalizing. Remember that everything in the contract is negotiable. Once any changes have been made and initialed, it’s time to sign on the bottom line. All that remains is removing any contingency clauses, arranging financing and clearing title.
- Preparing for the closing. There’s little for you to do now except wait. Stay abreast, however, of what’s taking place. If the buyer is turned down on a loan, it could jeopardize the whole deal and your house could be put back on the market. A day or so before closing, make sure all the necessary papers and documents have been gathered and are in the hands of the right parties.
- Papers you’ll need at closing:
- A copy of the sales contract and documentation showing that any contingencies have been removed or satisfied.
- All documents needed to complete the transfer of title. This may include certificate of title, deed, correcting affidavits, quitclaim deeds, survey and title insurance policy.
- Prorations for ongoing expenses such as insurance premiums, property taxes, accrued interest on assumed loans and utilities (if not shut off between owners).
- Receipts showing payment of the latest water, electric and gas bills.
- A certificate from your lender indicating the mortgage balance and the date to which interest has been prepaid.