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2016-11-09 11:43:27
Going To Sell A Home? The Purchase Contract…..

 

                             

What about the REPC?

You have decided to sell your home and just got it listed with your Real Estate Agent. You just got through all the listing papers and are relieved to get past all the paperwork. One of the furthest things from your thoughts now are the terms contained in the Real Estate Purchase Contract or the REPC.

Should you be concerned at this point? Probably. You home could sell rather quickly, so now is a good time to familiarize yourself with this contract.  

Maybe you think that the main thing you need to be concerned about is the bottom line to you on the offer. You might think that it doesn’t matter what the small print says.  You might think “My Realtor will let me know if there is something I should be concerned with”. Whatever your thinking might be on the subject of the purchase contract, this will be something very important to understand completely.

Am I Protected?

It is important to know that the contract protects both the buyer and the seller even though the contract approved by the state and used by licensed Realtors, is skewed toward the buyer. Granted, the sellers have rights as well, but the buyers certainly have the advantage on most clauses in the contract. I’ll go over some of those for you in this article. Most of the advantages come in the way of allowances for the buyer to change his mind or having the rights to back out should certain terms or conditions not be satisfied.

Earnest Money

The first part of the contract is the section regarding the earnest money, how much, when it will be paid and to whom. It is important to note that there are many things throughout the contract that trigger the earnest money going back to the buyer should the sale fail. The Earnest money is very protected and it is a rare occasion where the buyer loses his earnest money because he backs out. Only if a withdrawal is made after passing important deadlines contained in the contract will the deposit be in jeopardy. As a seller you have to know that it isn’t a done deal till it closes. Many things can happen through the course of the contract that would give the earnest money back to the buyer and you have to put your house back on the market. Usually everything that can be done to hold the sale together will be done. Many things go beyond the control of the seller or the Real Estate Agents.

                     

The Details

The next portion of the contract will be the most important as it lays out all the provisions of the contract. Here you will find out the amount the sellers are offering and what extras they are wanting to have included.  Anything that qualifies as personal property can be specified here, but will have to have ownership conveyed on a separate bill of sale at a later date.

Here is where the offer price is given as well as the planned financing and down payment.

Settlement and closing are two different things as stated in the contract. Settlement will be no later than the date specified on the last page of the Purchase Contract.

Closing will occur when the funds are transferred from the buyers lender to the Title Company and then it is recorded. As soon as the sale is recorded with the county, the sale is considered closed. At that point the home belongs to the buyer, it is no longer yours. Should you need more time after that to move out it would have to be agreed to before settlement. You might end up paying rent to the buyers for extra days needed to move out.

                     

 

Due Diligence

This is a large part of the contract for the buyer. Due diligence includes everything from the inspections, to the appraisal and financing conditions. It will be up to the buyer to inspect everything about the house that might make it a deal killer for them. They are now allowed to hire professional inspectors to look at everything. If problems are found, the buyer’s agent will bring a repairs addendum to you with items the buyers would like addressed. At this point both sides can negotiate a solution to the request. You can fix any, all or none of the items. Or make a monetary allowance for the buyers to fix it themselves after the purchase.

If you can’t come to an agreement, you or the buyer are then able to withdraw from the contract on the due diligence provision. Provided you are still within your date stated on the REPC, the buyer will receive his earnest money back.

Addendums

Addendums are also part of the Real Estate Purchase Contract. This is the vehicle we use to change or add to the original contract. For example, you might need to extend your closing date because your new home isn’t quite ready for you to move into. Even the purchase price can be changed with an addendum. Both the buyer and the seller have to agree to and sign each addendum to make it legal and part of the contract.

Details

The balance of your purchase contract details everything from the results of the buyer or seller defaulting on the contract, to who pays attorney costs should a dispute arise about the transaction, also specifics on who is responsible for insurance on the property as the sale progresses. You will be responsible for having the home insured till closing occurs.

                      

Deadlines

The last page of the REPC deals with contract deadlines. These dates will be important to you and the buyer. The Settlement deadline will be important for you as well as the buyer. If it is too far away for you, it can be changed with an addendum. Understand that obtaining a loan these days takes more time than it used to. So allow at least 30 to 45 days to closing. Sellers disclosures usually are requested within the first week.  If you request an extension before the deadline and the buyer refuses to grant the extension, you or the buyer can then withdraw from the contract and the earnest money goes back to the buyer.

Just Ask

If this is all a new and confusing process for you, don’t be afraid to ask questions of  your Real Estate Professional. That’s what we do. Contracts are our specialty.  We will make sure you are aware of dates and responsibilities that need to be addressed before closing. Making the home selling process as painless as possible is the goal of any good Realtor.

 

Craig Keyser

The Keyser Team

Allstar Realty

 
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