“PROTECT YOUR INTERESTS”
Whether you are buying or selling a property, contract negotiation is the most essential step. The sales contract will define the details of the transaction and is a binding commitment on the parties. The time to seek legal advice is before, not after, signing. After signing the contract there is no further negotiation, so be certain you read it fully, understand and agree to all of its terms. Many unforeseen problems can and do arise when parties do not fully read and understand the sales contract. Items that cause most contract misunderstandings and difficulties are:
- Personal property included in the sale(washer, dryer, refrigerator, chandelier, stove, drapes, etc.). Do you know what personal property is staying with the home and what is not?
- Condition of the property. The Florida Association of Realtors/Florida Bar Association standard real estate purchase contract requires the property in good condition and repair – or pay up to 1 ½ % of the sale price to correct these issues. The ” As Is” sales contract gives the buyer a specified number of days after the contract is signed to inspect the property and accept the property as is or terminate the contract. Do you know which contract is being utilized and what the potential consequences are?
- The division of of closing cost and loan point charges. Many mortgages offer the potential for the buyer to pay a percentage of sellers closing costs including loan origination fees, surveys, credit report fees, recording fees, title insurance, etc. This negotiation can be very important to a buyer trying to limit the total amount of out of pocket expenses incurred during the purchase. The sales price is negotiated so that these seller concessions are included in the sales price. Do you know which closing costs you will be paying and how much these costs will amount to?
- Arrangements for financing. How long does the buyer have to make application? How long does the buyer have to obtain a loan commitment? If you are a seller, realize that your property will effectively be off the market during this time period. If you are a buyer, realize that these dates are binding. If your lender does not give you a loan commitment by the date on the contract, the contract is in breach and the seller may then sell to another buyer.
- Does the buyer need to make the purchase contingent on the sale of another property? If so, then the contingency must be carefully considered by both the seller and the buyer. An addendum to the contract will be needed acceptable to both parties.
- Termite inspection. Does the sales contract call for a termite inspection and if so what are the remedies if termite activity is discovered during inspection. The Florida Association of Realtors/Florida Bar Association standard real estate purchase contract requires the property to be free of termites and termite damage – or pay up to 1 ½ % of the sale price to correct the issues. The “As Is” contract does not require a termite inspection.
- Earnest money deposit. How much money will be held in deposit until closing? Where will the money be held? If the sale falls through, whoever is holding the money will determine who receives it according to the terms and conditions of the sales contract. Blackburn Law Firm’s Real Estate Escrow account is available for earnest money escrow deposits. This option is highly recommended if Blackburn Law Firm will be handling the settlement and closing.
There are many more potential misunderstanding and difficulties that can and do arise when the sales contract is not fully considered. The best opportunity to avoid any potential difficulties is before the sales contract is signed. Blackburn Law Firm will assist you by providing you with an appropriate purchase contract and assist you with filling it out, or review a purchase contract submitted by a potential buyer, for a flat fee of $100.00.
If difficulties arise after a sales contract is signed by all parties, Blackburn Law Firm is available to assist youand insure that you are represented effectively. Fees for such services will be discussed and agreed upon in advance.