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Real Estate Ramblings
Home Buying Contract Errors to Watch Out For
Tuesday, February 7, 2012
When setting up contracts between buyers and sellers, I find Dr. Seuss’s iconic words come to mind: “Be who you are and say what you feel.” It’s a frequent occurrence that buyers and sellers think their contract says one thing, but the language actually says something else. Here are four ways to avoid common contract mistakes.Tick Tock
First and foremost, I always recommend that you should give yourself enough time to get a loan. Many contracts are contingent upon the buyer’s ability to get financing by a certain date. Considering the lending climate that exists today, I advise that buyers allow themselves lots of wiggle room in terms of time to get approval for a loan. If the date passes and the buyers haven’t secured any financing, sellers may terminate the contract and keep the monetary deposit.
Don’t try to close too quickly or skip steps. Give yourself enough time to do things properly. There are lot of things that need to be done, so give everyone enough time. Be realistic about your closing date.
Clueless about home financing? The mortgage information section of my website (http://www.chathamontario.com/Mortgage_info.asp) will tell you all you need to know!
“That’s Mine!” – Deciding Which Items Stay
We’ve all heard stories of buyers who walked into a new home only to discover that certain appliances were missing.
To both buyers and sellers: make sure the contract explicitly states which items will be staying with the home and which will be going. Pay attention.
If you’re not convinced that you need a realtor when buying a home, there are a few more reasons on my website at http://www.chathamontario.com.
Know the Effective Date
One piece of information I like to warn my clients about is that the contract doesn’t always take effect the day they sign it.
Which could be bad news bears for you.
In every contract, there are things that must be done within X number of days from the effective date. Things such as inspections, loan applications and approval, title searches – I could go on and on.
If you don’t know the date that the contract went into effect and you miss the deadlines for some of your “To Do” items, you may no longer have a valid contract.
Make buying a home as painless as possible. Take a look at why you should have a home inspection.
Have a Signing Party!
Depending on who is buying the home, more than one signature may be required. Sometimes the home may be owned by both spouses or other owners. Sometimes a corporation may be making the purchase. Make sure all of the parties sign the contract. If someone fails to sign the contract, they are not bound to adhere to the conditions of the contract.
In life, one of the biggest financial decisions you’ll make is the decision to buy a house. Sometimes you’ll make this decision more than once! As such, you should take it seriously. Ensure that anything important to you is in writing.
