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What Should Be Included in a Real Estate Purchase Contract?

Posted on in Real Estate

Libertyville IL home purchase agreement attorneyA residential real estate transaction usually begins when a prospective buyer places an offer on a home and the seller accepts their offer. Once a purchase price is agreed upon, the parties will sign a purchase contract, and they will then work to complete all requirements that must be met before the closing date on which the transaction will be completed. Those who are buying or selling a home will want to understand the terms that will be included in their purchase contract, and by working with an experienced real estate attorney, they can make sure their rights will be protected throughout their transaction.

Terms of a Real Estate Purchase Agreement

A purchase agreement is a legally binding contract between the buyer and seller. It will include identifying information about the parties, a description of the property being purchased, and the planned closing date, as well as any details about when the buyer will take possession of the property. The parties may also negotiate other terms that should be included in the contract, such as:

  • What is included - In addition to the home itself, the contract should specify any other items that will be included in the sale. These may include appliances such as a refrigerator, dishwasher, stove, washer, or dryer, as well as decorations or other fixtures.

  • Earnest money - A buyer will usually be required to make a deposit of around 1 to 3% of the total purchase price. The contract should specify the amount of the deposit and how it will be used when the transaction is completed. For example, earnest money may be applied to the buyer’s down payment or toward closing costs.

  • Closing costs - There are multiple fees and expenses that must be paid at the time of closing, including taxes, title fees, and a real estate agent’s commission. A purchase contract should specify whether the buyer or seller will be responsible for paying certain closing costs.

  • Contingencies - A contract will contain a variety of conditions that must be met before the transaction can be completed. Loan contingencies may state that a buyer can back out of the transaction if they are unable to obtain financing at a specified interest rate. Home sale contingencies may be used to ensure that a buyer can sell their current home before purchasing their new home. Inspection contingencies will ensure that any defects uncovered during a home inspection will be repaired or addressed before the closing date.

Contact Our Waukegan Residential Real Estate Attorneys

If you are planning to buy a new home or sell your current home, the attorneys of Newland & Newland, LLP can help you make sure your rights are protected throughout your transaction. We will work with you to negotiate a purchase contract that will provide you with the protection you need, and we will help you address any other issues that may arise before your closing date. To set up a free consultation and learn more about the services we provide, contact our Lake Forest real estate lawyers today at 847-549-0000.

 

Sources:

https://www.thebalance.com/purchase-contract-1798612

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