Real Estate Purchase Contracts

When buying a home in Greater Salt Lake City/Park City, most of the home buyer's effort is put into finding the right home. But very little thought is usually put into writing the purchase offer.

Often the real estate agent drags out a "standard purchase contract." The truth is there is no such thing as a standard purchase contract without needing to add the content that retains to your particular needs.

However, there are many different forms printed by local or state Realtor associations, local multiple listing services, individual real estate offices and form publishing companies. Utah State law mandates some provisions in real estate  purchase offers, but buyers and sellers are free to negotiate additional provisions.

Avoid vague provisions

If you are presented with a printed purchase offer form by a real estate agent to sign, consider who wrote the form. Most printed purchase offers are prepared by attorneys working for clients with vested interests, such as real estate brokers and realty trade associations.

Although it takes time, be sure to read the form before signing it. When you first start looking with an agent at homes for purchase, ask the agent for a blank copy of the purchase offer that agent uses. Then study it before making a purchase offer. If you don't like or understand a clause, unless it is required by state law, don't hesitate to cross it out. Just because it is printed doesn't mean it can't be changed or negotiated.

Well-written purchase offer printed forms contain blanks for the names of the buyer, address of the property, purchase offer price, financing details and amount of the good faith earnest money deposit.

There is no rule of thumb as to how large the deposit should be. But real estate agents encourage buyers to make as large a deposit as possible, thus enhancing the probability the buyer will complete the purchase as agreed.  It also show the seller how serious you are about this offer.

If your purchase offer is considerably below the seller's asking price, a large earnest money deposit often impresses the seller into accepting a low offer. However, be sure the deposit is not to be given to the seller until the sale closes but shall be held safely beyond the seller's control, often in a trust account.

Well-written printed home purchase forms contain a detailed finance contingency clause. Read it extremely carefully. Be sure it says your purchase offer is contingent on both the buyer and the property qualifying for a specific mortgage.

Damage clause a good idea

Many printed purchase offers contain a liquidated damages clause. That means the exact damages would be hard to determine if the buyer defaults, so the buyer and seller agree in advance that default damages will be limited to a specified amount. This is usually a good clause for the buyer to sign because it prevents litigation.

Most home buyers want their offer contingent upon their approval of a professional inspection report on the home, I always require my Salt Lake City clients to have an inspection conducted unless they are a building contractor themselves.  Smart buyers accompany the inspector, who should be able to explain any defects discovered, their importance and estimated cost of repairs.

The purchase offer often specifies the seller is to pay for necessary repairs, up to a designated maximum amount. Additional inspection clauses may provide for termite, pest control, energy efficiency, radon, plumbing, electrical, roof and other customary reports that are subject to the buyer's approval.

The new Utah Real Estate Purchase Contract states that a home is now being sold "as is." That means the seller will automatically warrant the condition of the functioning systems of the home.  However, be sure the purchase offer specifies the seller and real estate agent have disclosed all known property defects in writing. Some states require such disclosures, whereas they are voluntary in other states. It is usually a good idea for the buyer to make the defect disclosure part of the purchase contract.

The general rule is no personal property now on the premises is included in the sale of real estate. If you want any personal property included in the sale price, such as the refrigerator, washer, dryer, and drapes, be sure to list them specifically even if the agent's listing sheet says they are included.

There is a lot of free information available to you about buying, selling or investing in Greater Salt Lake City/Park City real estate. For complete information about the Greater Salt Lake City/Park City real estate market including current homes for sale, property values and more please visit the most complete website online dedicated to everything Greater Salt Lake City/Park City real estate at www.BuySaltLakeHomes.com. So please feel free to contact me with any of your mortgage questions and I will me more than glad to answer you queries. Call me on my cell at 801-518-4599 or email me at kathyo@kathyohomes.com.

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