There are several issues that you have to keep in mind before signing a contract. A contract in itself governs the right sand duties of the parties to it. Real estate contracts are usually written in a register that is easy to understand to whoever needs to read it. Still, it is a legally binding document and it is important to proceed with signing with caution. Unless both parties understand the terms of the contract, misinterpretation can show costly, with limited possibilities of change.
Learn the Language
There are dictionaries of real estate terms which you should contact before approaching a written contract. They contain language specific to real estate, and tons of unfamiliar terms. The dictionary can help you as you read along the terms and conditions, so you better understand them.
Checklists
There is a small possibility that the contract is missing one of its basic elements describing the real estate transaction. Read through it with your lawyer and check if the information concerning the property location, its price, required down payment, details on financial terms, and the closing date are consistent. In addition, the contract should contain details on any contingencies that might occur during the contract signing or shortly after it.
Determine Seller’s Responsibilities
The seller’s responsibilities should state clearly in the contract. The details can be different from contract to contract, but it should contain a time limit to respond to buyer offers, and a clause that makes the seller obligated to present the property that is meeting specific conditions, conduct necessary repairs, etc. Make sure the contract includes a list of fixtures on the property that will be transferred to the buyer along with the property. Finally, the contract should oblige the seller to offer a clear title to the buyer.
Determine Buyer’s Responsibilities
The contract should also state clear details concerning the buyer’s responsibilities and rights regarding the transaction. It is paramount that the contract includes details what passes with the good-faith deposit, if the transaction fails to be complete. Hiring a conveyancing solicitor will make it easier to determine that provisions for an initial professional inspection that is to verify the condition of the property are included. If the inspection turns up any significant issues, the contract is void. Eventually, the contract must contain a section that enables a final walk-through by the buyer before closing. If the walk-through leads to buyer dissatisfaction, there should be contingencies stated within.
Study Contract Withdrawal Terms
Allow time for careful reading of the contract withdrawal terms. It should contain the exact conditions needed for enabling both parties to withdraw the transaction, if necessary. These conditions are your small door for bailing out of the contract if anything goes wrong. Make sure you understand every option that is available to the detail.
Consult your real estate agent to clarify any unclear sections of the contract. Before asking, it is easier to highlight the areas you don’t understand, so you can get them explained quickly. Although the real estate attorney will charge a fee, there is more to be lost in misunderstanding the contract on your part.
