Major parts of the purchase contract

Drink a big piping hot cup of coffee for this one. This may not be the most glamorous topic and it may feel like a drag, but this is an especially important contract you will have to sign and should be aware of it you ever want to own a home. Like doing your taxes, buying a home can be boring with all the paperwork, but it's important you are aware of what is going on in case something happens. The more informed you are, the less likely you are to make a great decision. You're thinking of putting in an offer and your agent didn't go over the details or expectations for the offer. Maybe you already got your offer accepted and are still confused about what is in here. Well, you are not alone. There are countless times I've seen people confused and scared about the what if's and if they are protected in certain circumstances. Hell, I have even seen agents that do not have a complete understanding of the most crucial and basic document that we see daily.

Purchase price- How much are you offering to buy this home? Usually you decide this, the agent can show or advise you if the asking price is right or not. But this number depends on you. This number may be intimidating, but the number that is most important is your monthly payment. Whoever gave you your pre-approval should be able to crunch the numbers to give you a good estimate of how much your monthly payment will be.

Duration of offer- The offer has a deadline and is voided if not answered by this time, usually 24-48 hours after received. This is to minimize the potential of having two homes under contract at once and losing your deposits.

Purchase and Sales Agreement- The second deposit is due 24 hours after this is signed. All terms that are agreed upon are put in this contract. This supersedes any other agreement that was put in place beforehand. This date is about 10-14 days after the offer is accepted to allow negotiating and inspections to happen in this window.

Closing- This is the day/time/place of when you are officially a homeowner. You will receive the keys once it is recorded by the town. Usually, 30-45 days after the offer is accepted you can expect to be in your new home, barring any extensions

Escrow- This is who is holding the deposits for the duration of the transaction. If you want more information I wrote a blog about that whole topic a couple of weeks ago, I highly recommend reading it.

Contingencies- Mortgage and Inspection- You are letting the sellers know that you have to get approved for a mortgage in order to buy this home. If you don’t qualify for one, then the deal is voided, and you get your deposits back. It is here to protect you in case something happens. By law you’re allowed 10 days to do any inspections your heart desires and the sellers are required by law to allow it. If something comes up on the inspection that you want addressed, then you can do it before the purchase and sales is signed. You can ask for the homeowner to fix it, ask for money back to cover for it being fixed, or if it is bad enough you can walk away with your money back to you.

Additional terms- This is where you put anything additional in the offer that makes it look stronger or that favors you. These terms depend on the market and supply/demand. Can have anything you want. Ranges from wanting their fridge, saying you will pay $1,000 more than the next highest offer, or maybe you fell in love with their pug and want it to stay along with all its toys. It’s really up to you and your wants/needs. Just remember the more things in this section may make your offer look less appealing.

Accept/Deny/Counter- Exactly what it looks like. It is a checkbox to see if they accept, deny, or did a counter to your initial offer. Most of the time the agent will just contact the other agent about the offer and discuss it on the phone rather than this way. The phone is much quicker and no need for additional signatures beforehand. If the offer is accepted, then you will receive the signed copy and you have 24 hours to give them the first deposit check or the deal is voided.

That's about as entertaining as someone can make the breakdown of a contract. The pain is over. Now get up, have a nice stretch, and walk around to get the blood pumping again. Also don't be afraid to contact me for any other questions you may have regarding real estate unless you have an agent of course. If you hire me to represent you, you can expect these nuggets of information on the daily.

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