You’re finally tired of renting and realize the $1,500 you’re spending on rent each month could go towards owning your dream home. However, the thought of going through the home buying process scares you. You don’t know where to start, what you should know, or who to talk to. You’re not alone. Buying your first home can be a terrifying experience for many reasons. In 2015, 35% of all home purchases were by first time home buyers.[1] Educating yourself on the home buying process in advance will help you make the right decisions and prevent buyers’ remorse. Knowing these terms will help protect your interests when buying a home.
Buy/Sell Agreement
A binding agreement detailing the relationship between the buyers, sellers, and their respective agents representing them throughout the real estate transaction. It is very important that the duties of brokers and agents are well defined in order to prevent confusion. Items included in this document varies by state but usually include the following:
Property Description: Describing the property to be sold in great detail so there is no question what a buyer will receive when the deal is finalized. If you expected to buy a house along with a beautiful chandelier in the foyer, you better confirm that the chandelier is listed in the property description.
Price: This one is obvious. The sale price the parties agree to is an essential part of the transaction. The sale price or method for determining the sale price should be clearly stated in the buy/sell agreement.
Act of Sale: Parties will agree to the date of the act of sale when money will change hands, and all the legal documents will be signed.[2] At this point the new owner can finally move into their home. When setting this date also known as the “closing,” buyer and seller should allow enough time for the attorney or title examiner to examine the title for any issues.[3] The last thing a new home buyer wants to deal with is discovering after the sale that the home has a defective title.
Cash or Finance: We would all love to have $100,000 dollars to pay for a house in cash, and some people do. However, financing your new home is also a popular option. The agreement will indicate whether the transaction is a cash sale or financed sale. This is important because financing a home will make the transaction contingent upon the buyer obtaining financing.
Our next blog will cover Contingencies, Inspections, Deposits and more.
[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]