A Buyer’s Guide to the Sales Contract

Once you’ve found the home you want to settle down in, the next step is to make it yours. This is done with a series of steps, one of which is signing the sales contract. The sales contract is a legally binding document. If you are intimidated by signing one, you are perfectly right to feel so. Nevertheless, as long as you make sure the information contained in the sales contract is accurate and in your best interest, then you have nothing to fear.

The sales contract should include several pieces of information that have an impact on the sale. I have put together a list below of the key pieces of information that most sales contracts will include.

• A legal and physical description of the property being purchased. The legal description is used by the county government to identify the property. Even if the street address changes, the legal description of the property will never change.
• The selling price and method of payment should be included. In most cases, a mortgage is the method of payment. In this section of the sales contract, there should be details about the amount of the down payment, mortgage loan, and earnest money deposit. If you have any contingencies about the mortgage, they should be listed as well.
• The closing date should be included in the sales contract.
• What’s included and what’s not included in the sale should be detailed. For example, if the seller agrees to leave appliances, it must be listed in the sales contract. Otherwise, you could end up purchasing your own!
• Any warranties that are included with the home should be detailed in the sales contract. A description of the warranty should also be listed.
• Termite and pest inspection should be conducted. The sales contract should detail not only who will pay for the inspection, but also the party responsible for any repairs if infestation or damage is discovered.
• The exact date that the buyer will take possession of the home should be included.
• The sales contract should include the amount of time that the seller has to respond to the offer, whether it is to accept, reject or counter the offer.
• Any property disclosures pertaining to the house should also be included in the sales contract.

It is highly recommended that you work closely with your real estate agent as you prepare your offer. As experts in negotiating, they are the key to putting together a successful contract.