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Does your real estate purchase contract have the right stuff?

Are you buying a house here in Waukesha? Congratulations! Before you can take possession of your new home, you will need to go through several steps that include reviewing, negotiating and executing numerous documents.

The first major document that requires your attention is the purchase and sale contract. This outlines the terms of your deal with the seller. It should contain all of your agreements with the seller, but will generally need to include certain elements in order to protect your interests.

What should go into your purchase contract?

Terms that can be important in purchase contracts include the following provisions

  • If you currently own a home, you may want to include a provision that the sale is contingent upon the sale of that home. More than likely, you will need to put a time limit on this provision, such as a maximum of 30 to 60 days. If the seller agrees to this type of provision, he or she will probably not want to take the house off the market for much longer since he or she would lose that time to find another buyer if you cannot sell your home.
  • Like most other people, you may need a mortgage loan in order to complete the purchase. You may want your purchase contract to state that the sale is contingent upon you being able to obtain financing at a specific interest rate. If you can only obtain a mortgage loan at an interest that keeps you from being able to afford the home, the seller may be able to keep the earnest money you put down on the sale.
  • You'll likely want your contract to outline who is responsible for what closing costs. You may request that the seller pay a particular portion of your closing costs. These costs include things like title searches, appraisals and transfer taxes, among other things.
  • A home inspection is a useful tool to determine what, if any, issues the home may have that require repair. It can be important to have the sale be contingent upon passing the inspection. However, you could also specify that the seller would cover repairs up to a certain amount in order to allow the sale to go through. You can either request a reduction in the purchase price to cover the repairs and handle them yourself after the closing, or you could require the seller to make the repairs and have the home re-inspected.
  • If the seller agrees to leave certain appliances or fixtures in the home, the contract should specifically reference them.

If your circumstances require other elements in your contract, you should add them as well. 

Making sure your contract includes everything you need

A realtor is not an attorney. In order to make sure that you protect your interests and rights through your purchase contract, you may want to consult with an experienced real estate law attorney.

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