Do Read and Understand the real estate contract before signing! When you formally make an offer on a home you want to buy, you'll find out that you have a lot of paper works to fill. Simple contract can have as many as 20 sections. Understanding the contract can save you money, hassles and legal problems in the future. Here are some key points in the contract that you should take note of:
Price. This is the purchase price that the seller and buyer have agreed upon. Other payment considerations may also appear here, such as a down payment, mortgage terms and possession date.
Fixtures and Personal Property. Or what some Realtors refer to as the "What Stays" section. Unless specified in the contract, items such as light fixtures, faucets, carpeting, and other "permanent" fixtures must remain with the home. If you want the washing machine/dryer, refrigerator or exterior movable amenities, you must specify it on the Bill of Sale if not a permanent structure item. For example, shelving, garage remotes, shed, etc. Do not rely on verbal agreement, it is not binding! Consult with your Realtor for more specifics and common items associated with a property sale in your area.
Closing Costs. The agreement should specify who will be paying for common fees associated with home purchase. Common fees may include escrow fees, title search fees, title insurance, notary fees, recording fees, transfer tax and so on.
Home Inspection. This section of the contract allows you to back out of the deal if a home inspection reveals that the property needs a major repair. Severity of pending repairs may be dependent on the financing package (FHA, Conventional, or VA) associated with your loan. If you are paying cash, then all repairs may be negotiable.
Terms of Withdrawal. This clause states the conditions that allow you or the seller to withdraw from the agreement. It's a good protection on both parties.
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