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Here are some important points to consider.
The real estate broker probably will give you a preprinted form of
agreement of sale. You may make
changes or additions to the form agreement, but the seller must agree to
every change you make. You
should also agree with the seller on when you will move in and what
appliances and personal property will be sold with the home.
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Sales Price:
For most home purchasers, the sales price is the most important term.
Recognize that other non-monetary terms of the agreement are also
important.
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Title:
"Title" refers to the legal ownership of our new home.
The seller should provide title, free and clear of all claims by
others against your new home. Claims by others against your new home are sometimes known as
"liens" or "encumbrances."
You may negotiate who will pay for the title search, which will tell
you whether the title is "clear."
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Mortgage Clause: The agreement of sale should provide that your deposit would
be refunded if the sale has to be canceled because you are unable to get a
mortgage loan. For example,
your agreement of sale could allow the purchase to be canceled if you cannot
obtain mortgage financing at an interest rate at or below a rate you specify
in the agreement.
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Pests:
Your lender will require a certificate from a qualified inspector
stating that the home is free from termites and other pests and pest damage.
You may want to reserve the right to cancel the agreement or seek
immediate treatment and repairs by the seller if pest damage is found.
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Home inspection: It is a good idea to
have the home inspected. An
inspection should determine the condition of the plumbing, heating, cooling
and electrical systems. The
structure should also be examined to assure it is sound and to determine the
condition of the roof, siding, windows and doors.
The lot should be graded away from the house so that water does not
drain toward the house and into the basement.
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Most buyers prefer to pay for these inspections so that
the inspector is working for them, not the seller.
You may wish to include in the agreement of sale the right to cancel,
if you are not satisfied with the inspection results. In that case, you may want to re-negotiate for a lower sale
price or require the seller to make repairs.
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Lead-Based Paint Hazards in Housing Built Before
1978: If you buy a home
built before 1978, you have certain rights concerning lead-based paint and
lead poisoning hazards. The
seller or sales agent must give you the EPA pamphlet "Protect Your
Family From Lead in Your Home" or other EPA-approved lead hazard
information. The seller or
sales agent must tell you what the seller actually knows about the home's
lead-based paint or lead-based paint hazards and give you relevant records
or reports.
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You have at least (10) days to do an inspection or risk
assessment for lead-based paint or lead-based paint hazards.
However, to have the right to cancel the sale based on the results of
an inspection or risk assessment, you will need to negotiate this condition
with the seller.
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Finally, the seller must attach a disclosure form to
the agreement of sale, which will include a Lead Warning Statement.
You, the seller, and the sales agent will sign an acknowledgment that
these notification requirements have been satisfied.
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Other Environmental Concerns: Your city
or state may have laws requiring buyers and sellers to test for
environmental hazards such as leaking underground oil tanks, the presence of
radon or asbestos, lead water pipes, and other such hazards, and to take the
steps to clean-up any such hazards. You
may negotiate who will pay for the costs of any required testing and/or
clean up.
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Sharing of Expenses: You need to agree
with the seller about how expenses related to the property such as taxes,
water and sewer charges, condominium fees, and utility bills, are to be
divided on the date of settlement. Unless
you agree otherwise, you should only be responsible for the portion of these
expenses owed after the date of sale.
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Settlement Agent/Escrow Agent: Depending
on local practices, you may have an option to select the settlement agent or
escrow agent or company. For
states where an escrow agent or company will handle the settlement, the
buyer, seller, and lender will provide instructions.
- Settlement Costs: You can negotiate which settlement costs
you will pay and which will be paid by the seller.
