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November
14

Whether you're buying or selling, whether the property is residential or commercial, all real estate transactions have one thing in common: a contract. The goal of a closing contract, or purchase contract, is to protect both the buyer and the seller by ensuring that all expectations are clear. Keep reading to find out what 7 things you don't want to forget in your closing contract.   

Basic Legal Requirements

Like any contract, real estate contracts need a few essential elements to be considered legal (e.i., enforceable in court). A lot of these elements are things that will seem obvious—the correct names and addresses of all parties and properties involved, the seller being the legal owner of the property, both parties being legally competent to enter a contract, just to name a few. However obvious as they may seem, you don't want your contract to be without them! It's worth your time to double-check these little things—trust us!

Price and Financing Terms

Something else that seems obvious but that you wouldn't want to forget is the money aspect of the agreement. That includes the agreed-upon price of the property, as well as how it will be supplied by the buyer (paid full in cash, a new or existing mortgage, any type of loan, etc.). A contract might also include earnest money requirements, which is a fee used to confirm the contract. Earnest money typically ends up going towards the down payment.    

Closing Cost Details

Any real estate contract should also address the terms of closing costs, specifically who's responsible for paying what. Closing costs are typically expenses that aren't included in the property price; for example, escrow fees, title insurance, transfer tax, notary fees, etc. Your contract should cover whether the buyer or the seller will be covering closing costs or if they will be split up between both parties. Some consider it standard practice for one party to cover costs, while in certain circumstances, splitting them may be more likely. If you're not sure where the money is coming from, don't hesitate to ask. Because it may be from you! 

What's Included in the Sale

Certain items may be displayed when a property is staged, but that doesn't necessarily mean that all of those items will be included in the sale. That means things like appliances and light fixtures but also some items that you may not have considered, like window treatments, bathroom fixtures, and heating and cooling equipment. Sellers should make sure that excluded items are carefully outlined in the contract, and buyers—if you want something specific, make sure you negotiate for it.  

Disclosure of Health Risks and Defects

Most states have strict laws requiring sellers to disclose any known defects on the property, especially if they may impact the property's safety and value. Whether or not sellers are required to actively search for defects can vary state by state, and some places may require sellers to search for certain defects but not others. A few commonly disclosed items include lead paint, termite damage, and the presence of radon gas. These things could have serious impacts on your home sweet home (or even your decision to buy it at all), so you should make an honest effort to find out all you can.

Contingencies

A contingency is a condition added to the purchase offer for a piece of property. Generally, a contingency will allow the buyer to default—or walk away from the agreement—if the conditions laid out in the contingency aren't met. While there are many different types of contingencies, some common ones include allowances for appraisal, financing, home inspection, and title report. If you aren't sure what contingencies you may need for a certain property, your real estate agent can help. Taking full advantage of these contingencies can make a big difference in your home buying experience! And offering additional contingencies may be just what it takes to sell.

Important Dates

A few dates that you want to make sure are agreed upon are an expiration date if the offer is not accepted, a closing date that marks the conveyance of the property's title from seller to buyer, and a window of time during which the buyer may withdraw while the contract is still in negotiation, as long as notice is provided. We highly recommend keeping these dates at the front of your mind so that they don't sneak up on you—even if that means sticky note reminders on every mirror, door, and window you have. The last thing you want is for a milestone to hit without you feeling confident in your decision.

Working out a closing contract can feel like a daunting task. But remember—your real estate agent is there for you! At The Masiello Group, we expect our agents to be in your corner and come armed with all the knowledge and experience you'll need to do it right. 

The Masiello Group is a second-generation family company that has been a trailblazer in New England real estate since 1966. With now more than 35 offices throughout northern New England, we're the largest residential real estate firm north of Boston to offer a complete suite of home services, including buying, selling, mortgage, title, insurance, relocation, and more. 

Our agents are eager and excited to meet your real estate needs! 

You can find more information on today's market and other real estate trends by reading our blog weekly at https://www.masiello.com/news-and-updates/.

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