Real estate transactions and disputes are legal matters from start to finish. Yet, most parties involved in such matters are not experts in real estate laws.
That’s why this website exists. Whether you’re looking to buy or sell real estate property, are entangled in a property dispute or simply want to learn a thing or two regarding real estate legislation, we’ve got you covered! Here, we cover a variety of real estate law topics so you can get the information you need hassle-free.
We’re not a real estate law firm, but our well-researched, original pieces can increase your knowledge of how the real estate law system works. What we post on our website shouldn’t be used as a substitute for professional advice offered by real estate attorneys.
How To Examine The Contract of Sale
The contract of sale is a crucial document that explains the terms of a property purchase. As a buyer, you should work with an experienced conveyancer who will ensure the agreement addresses your concerns and interests. Below are several things you should check in the contract of sale.
Disclosures
Most sellers want to sell their property on a buy-as-is basis. Simply put, the buyer should buy the home in its current state. As such, the seller must indicate property defects. These could include a faulty drainage system, damaged insulation, leaking roof or problems with the electrical system.
Earnest Money
Earnest money is a small amount of money (typically between 3-5% of the asking price) that a buyer remits to the seller as a commitment to purchase the property. Once the seller receives this money, he or she should not receive offers from other people interested in the property. The seller could incur a penalty if he or she decides to sell the property to another buyer. On the other hand, the buyer may have to forfeit this amount if he or she is unable to meet the terms of the contract before the closing date.
Contingencies
These are the requirements that each party should meet before the closing date. For instance, the seller should allow the buyer to conduct a home inspection. Ideally, the buyer can opt out of the deal if the property has severe defects that were not included in the disclosures. For instance, if the inspector finds out the house has bent pillars and warped slabs, the buyer might be able to back out of the deal. Alternatively, the seller could undertake repairs. Other contingencies could include the provision of building permits and strata and lease documents. Besides, you could also ask for an appraisal.
The Possession Date
The possession date is the day when a buyer can move into the house. A seller who intends to purchase a new home after selling their current home may push the possession date. On the other hand, a buyer who is in urgent need of a house may want the possession date to be as soon as possible.
The Closing Date
The closing date is the day when the property changes hands. If the buyer has not secured financing by then, then the seller is free to consider other offers. On the other hand, the seller must have met the set contingencies before this date. Otherwise, he or she will have to return the earnest money.
The contract should also have an amendment clause that allows parties to change the terms of the contract to suit changing conditions. For instance, you may wish to push the closing or possession date.
When evaluating the contract of sale, check the disclosures, earnest money, contingencies, possession and closing date. Contact a company that offers conveyancing services to learn more.