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The purchase agreement is a written contract that is binding upon both the buyer and the seller. If there is something that is important to you, it should be contained in the purchase agreement. At a minimum, the purchase agreement should contain the property description, price, earnest money, personal property, which the seller should leave, financing, title and inspection contingencies, dates for closing and possession, and tax and cost allocations. For most people, purchasing real estate is the largest transaction they will undertake during their lifetime; you need to adequately protect yourself during the process.
If you are a buyer, you may want to meet with a lender prior to searching for your new home. Your lender will help you understand your anticipated mortgage payments, the applicable interest rate, and the funds that will need to be escrowed. As a seller, you will want your prospective buyer to be “pre-approved” for a loan in the amount stated in the purchase agreement.
The buyer should ask for acceptable inspections as a contingency in the purchase agreement. As attorneys, we see a lot of disputes develop after transactions that are the result of inadequate inspection or not fully exploring issues that are included in the inspector’s report.
The seller typically is required to provide a title insurance policy to the buyer insuring marketable title to the property. The title commitment will list all of the recorded documents that affect the property, including easements and restrictive covenants. These documents should be reviewed carefully. A survey is often recommended and will help protect against boundary disputes with neighboring property owners.
Your home is one of your most valuable assets, and you should carry homeowners insurance, which typically covers damage to the property as well as general liability.
Typically, it takes around 30 to 45 days to satisfy all of the conditions and prepare for closing. At closing, the seller will deliver a warranty deed, and each party will sign the closing statement, which shows the allocation of costs and distribution of monies.
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