| The Purchase
Contract The
Residential Real Estate Sale Contract form is used to arrange for the
sale
of a free-standing residential home. It provides for the traditional
arrangement between a seller and buyer, including a financing contingency,
pest and other inspections, and title matters.
For most people, the
purchase
of the family home is the largest and most important investment they make.
Many people approach their purchase with a view only towards making sure the
price is fair. However, the special nature of all real estate transactions,
large and small, demands that the parties pay careful attention to
contractual matters.
Often, the sales contract is
simply a form supplied by the seller’s agent and filled out by the parties.
While this may lead to a satisfactory transaction, both buyer and seller
often misunderstand the meaning and importance of many contractual
provisions and the options that are available.
The Purchase Offer
After a buyer finds a house
he or she wants, the practice is to make an offer to the seller. The offer
is usually first made orally, often to the seller’s real estate agent (if
there is one). If there are special conditions, it's best for the buyer to
disclose the special conditions to the seller with the initial oral
offer, just in case there is a problem. The process may involve a
counter-offer from the seller, another counter from the buyer, and so on.
The parties should soon know if they have an agreement on price and other
key terms, or if they will be unable to agree.
As soon as there is agreement
on price, it is customary for one of the parties (usually the buyer) to
submit a written agreement to the other. The written contract is signed by
one party and submitted to the other party. This signed contract constitutes
a formal offer. The contract provides for the offeror to designate a date
and time by which the contract must be signed and returned or the contract
offer expires.
Review All Contracts
Because of the importance and
the complexity of these transactions, both
buyers and
sellers are advised to
review the contract. This review will help you understand all of the
contract issues that should be in mind when negotiating and completing your
deal. Keep in mind that these are real estate legal contracts and
you are advised to employ the services of an experienced real estate broker.
Remember that transactions
involving condominiums, cooperative apartments, farmland and other special
kinds of property will require different contracts and forms. Transactions
in these kinds of property involve special considerations. You should talk
to a knowledgeable real estate broker before proceeding with a transaction
involving these or other special issues.
The Local Real Estate Market
Understanding the local
market is key to making sure your transaction goes well. To make sure you
know the local market, hire the services of an expert real estate broker.
The Commission
Compensation of agents is generally a matter of agreement between the agent
and the party with whom the agent has contracted. Traditionally, the seller
has paid a commission of 5% to 6% of the sales price to the seller's agent.
If the buyer also has an agent, the practice has been for the seller's agent to
split his or her share of the commission with the buyer's agent. If the
buyer has an agent and the seller does not, the seller does not normally owe
anything to the buyer's agent.
|
