Knowl­edge is power with pur­chase con­tracts

Sun Sentinel Broward Edition - - Money - Gary Singer

Q: Now that we found our dream home, how can we pro­tect our­selves re­gard­ing the pur­chase con­tract our agent wants us to sign? — Meg

A: The pur­chase and clos­ing of your new home is one of the most com­plex and stress­ful times most peo­ple will en­dure. Buy­ing a house is not some­thing that peo­ple do ev­ery day and any­thing un­known can be fright­en­ing. The key to get­ting through the process smoothly is knowl­edge.

It is al­ways a good idea to hire an at­tor­ney to help you through the process and to have some­one in your cor­ner, but the sim­ple re­al­ity is that the large ma­jor­ity of peo­ple do not do this. If you de­cide to go it on your own, there are still some things you can do to make the process eas­ier.

The first time most buy­ers see the pur­chase con­tract is after they find a home and their real es­tate agent wants to send it to the seller right away. With this time crunch, it will be al­most im­pos­si­ble to read the long and tech­ni­cal con­tract, let alone un­der­stand it. This is eas­ily avoided be­cause al­most all trans­ac­tions use a fill-in the blanks form con­tract. Ask your agent for a blank copy and read it be­fore you even start look­ing at homes. Ask your agent, or re­search on the in­ter­net, any parts of the con­tract that you don’t un­der­stand.

Re­mem­ber that even if there is a “nor­mal” way of do­ing things, ev­ery­thing in the con­tract is ne­go­tiable. You may be able to get a bet­ter price by, for ex­am­ple, agree­ing to pay a clos­ing cost that the seller would tra­di­tion­ally pay. You also need to un­der­stand the var­i­ous con­tin­gen­cies and time pe­ri­ods in the con­tract. Just be­cause your agent feels your of­fer will be “stronger” to the seller if you en­ter into an “as-is” con­tract, it may not be a good idea if you don’t have the ex­tra cash to make the re­pairs.

You also want to make sure all of the dead­lines, such as for get­ting a loan ap­proval, per­form­ing in­spec­tions, and get­ting as­so­ci­a­tion ap­proval, are long enough to ac­tu­ally ac­com­plish those things.

Once ev­ery­thing is to your lik­ing and un­der­stood, you can sign the con­tract — not be­fore. After the con­tract is signed, you should write down all of the var­i­ous dead­lines in your cal­en­dar. These are very im­por­tant and you can lose your de­posit if a dead­line is missed, even by a day.

Re­mem­ber that what you agree to has con­se­quences and the fact that you did not read or un­der­stand what you signed will not get you off the hook.

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