That stack of paperwork may look intimidating, but it's full of valuable information about your home sale.
Depending on where you live, the paperwork for negotiating an offer and sales contract is either a one-step or a two-step process. In either case, this is the very most important and legally binding part of your residential real estate transaction.
The multi-page document you and the buyer need to negotiate is called a 'purchase and sale agreement,' an 'earnest money agreement,' or a 'contract to sell' depending on where you live. State and local laws mean the content may vary a bit, too.
Take seller disclosure forms, for example. A termite inspection is not required in areas without termites. Radon is not present all across the country, but lead paint could be found in all buildings constructed prior to 1978 and, under federal law, sellers must disclose any known lead paint in the house. In some communities, sellers must disclose the presence of an underground fuel oil storage tank — a potential environmental hazard.
This contract is legally binding no matter where you live. Read it. And don't skimp on the fine print. If you don't understand something, ask an expert before you start negotiating with your buyer.
This contract spells out everything about the sale from the legal description of your property to the moment the new owner can take possession of the home.
Both seller and buyer can make changes to the contract language but both parties have to agree to, and initial, every change.
Among the subjects covered in purchase and sale agreements are the descriptions of the property, financial arrangements, inspections and disclosures, and settlement details. The actual forms contain many more subjects and much more detail. But here are some examples of the type of information included.
Note: When the contract is signed by both parties, it will spell out all terms and conditions of the home sale.
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