Real Estate --- The real estate contracts
A real estate contract can seem completely foreign to a first time buyer or seller. It seems like some extensive legal document that only experienced lawyers would understand. Anyone could get confused. However, you can easily start to understand the contract once you do a little research and define the basic terms of the document.
The first contract you may encounter as the seller is the listing agreement. This is the real estate contract you will sign with the agent who is going to put your house on the market. This agreement will state the name, address, and other important information about the seller and the property. It will also list the terms of the listing. For instance, how much the brokerage is charging for their services, how much you are selling the house for, how long the house will stay with the broker, and what is involved in the sale.
You will also see a lead paint disclosure form if your home was built before 1978. This form simply states when the home was built and that the seller either does or does not have documentation or information concerning to the lead paint. If there is documentation, the seller is expected to turn it over for inspection. If there is no known documentation, the buyer has a set amount of time to have a risk assessment done to see if a hazardous condition exists.
Along with the lead paint disclosure is the seller's disclosure. This is the form which enables the seller to tell about the property. For instance, if the property is in good repair this can be stated. The seller is responsible for releasing information on any damage which may have been caused due to flooding or other problems. If there was an infestation of any sort which had to be professionally treated, the seller will put it on this form.
The seller will also see another form the real estate agent must do. This is the agency disclosure form. This is the form which states the agent is working for the seller. It is crucial to have this one because some agents work for the buyer, while others are dual agents who work for both. The seller needs to know who his agent is working for.
The buyer has an entirely different set of real estate contracts they will handle. The mortgage contract will be used to find out the loan amount for purchasing the property. This will list the details of the purchase. It will tell how much the buyer will put up and how much the lender will contribute. There will also be an appraisal done so the property can be properly assessed.
The purchase agreement is a contract both the buyer and seller will be using. This is the form the buyer will use to make an offer on the property. This will also consists of the amount the buyer is borrowing, any closing costs they are asking the seller to pay, and the amount of earnest money put down. The purchase agreement will also list what else the buyer would like. For example, the window treatments or appliances may be requested in the purchase of the home.
One of the last forms both parties will see is the title disclosure. This is the paperwork which states the title is free and clear from all encumbrances. It also states the seller is the property holder and is allowed to sell the home.
One final contract is the mortgage paperwork at closing. This is where the title will change hands, the money will exchange hands, and the property now belongs to the new buyer.
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