The Purchase Contract

When you locate the home of your dreams you will make a purchase offer to the owner of the property via a written contract.

It is important to note that, in real estate transactions, verbal statements or agreements are not binding— EVERYTHING MUST BE IN WRITING!

We strongly recommend that you use the pre-printed contract form that your real estate agent will recommend. The form the agents utilize is generally prepared by the local association of Realtors by real estate agents and attorneys who are very experienced in real estate transactions. The contracts are drafted to be fair to both parties and to make sure that state and local laws are incorporated so that the contract is not legally void.

If you are contemplating building a new home, you will probably not be able to utilize the local board of Realtors contract because most builders have their own contract forms that they use when you purchase one of their homes.

If you feel the need to have your contract reviewed by an attorney, make sure you utilize the services of a real estate attorney who understands the contract and the issues raised in local real estate transactions. Make sure you present the contract to your attorney for review BEFORE signing it, because once your signature is on it, it is difficult and often impossible to renegotiate the terms.

Price

All contracts will obviously contain a provision where you incorporate the dollar amount you are offering the Seller.

Unless you are paying cash for the property, you will be obtaining a loan to finance your purchase. Typically, the contract will provide that the transaction is contingent upon your obtaining the financing necessary to complete the purchase. The contract provision will state the amount of the loan you will be seeking and, in most contracts, the terms you will be seeking, i.e. the interest rate and the length of the loan (usually 15 or 30 years). A special provision will be required if you are obtaining an FHA or VA loan, since the Federal government has specific requirements for each type of loan.

One of the most important terms of any purchase contract is the settlement date. You will propose a settlement date in the contract. You also have the right to choose the place of settlement. We hope that you will choose Resource Title Agency, Inc. This first step toward choosing the settlement firm is to write "Resource Title Agency, Inc." into the contract at the appropriate place.

Taxes, assessments, homeowners’ association fees, condo fees, water and sewer bills will be adjusted as of the date of settlement so that you pay your fair share and the Seller pays theirs.

The Seller will be committed to giving you clear title. In Ohio, the Seller will typically give you a General Warranty Deed, which means that the Seller is guaranteeing that nothing happened during the Seller’s ownership that would negatively affect title. (It is important to protect yourself further through the purchase of title insurance).

Some Lenders require that homes be examined by a licensed termite inspector as a condition of giving a loan, so your contract will have such a provision. If termites are found, the property will have to be treated and any repairs made prior to settlement. The jurisdictions vary as to which party pays for the inspection and treatment.

Each jurisdiction has a provision allowing the Buyer a pre-settlement inspection of the property. The scope of this inspection is very limited. Essentially, the purpose of this inspection is to determine that the property is substantially in the same condition as the day the purchase contract was entered. You may also wish to add a provision to the contract giving you the right to have the property inspected by a professional home inspector. Prior to presenting your offer, ask your agent for the appropriate language. If you desire such an inspection, include that language in your contract offer.

There are many other provisions in most purchase contracts. Here we have simply covered the primary provisions that are common to all of the contracts prepared by the various local associations of Realtors. Please call one of our offices located in or near the jurisdiction in which you are contemplating purchasing a home and we will provide you with additional explanations of the contract you will be signing.