According to the Real Estate Buyer's Agent Council, the purchase contract is a "legally binding document that sets forth the terms of the sale, establishes the rights and obligations of the parties involved, specifies the actions to be taken in order to close the sale, and establishes the time frames for those steps to be completed."

The contract form is typically filled out by the real estate agent, buyer's attorney or the buyer and seller if no agent is involved. Standard pre-printed forms contain such agreements as price, closing date, financial terms, and contingencies. Changes can be made to the contract by crossing out the part in dispute, circling the change and having both parties initial the change.

Some of the items that you may be agreeing to when you sign the pre-printed form may include: 

• What personal property will be included or excluded from the sale
• Who will pay for required repairs or retrofits
• What the seller's disclosure obligations will be
• What the seller's obligation to maintain the property will be
• What the seller is warranting about the property
• What the buyers inspection rights will be
• What will happen in the event either party does not comply with the contract
• What the parties legal rights and attorney fee provisions will be in the event of a breach of contract

You should try to obtain forms that are most commonly used in your area of the country. For example, in parts of the northeast, an attorney handles the seller's side instead of the Realtor. In parts of the south and west, agents act as legal fiduciaries.

It is easy for buyers and sellers to focus most on issues such as price, terms, and dates for inspection, appraisal, and closing, but losses can occur on both sides through missing the small details. Most misunderstandings occur between buyers and sellers when some terms are not fully disclosed. For example, do not assume that any moveable object such as window treatments, refrigerators, ceiling fans, chandeliers or special ornamentation will remain with the house. If any of those features are significant to you as a buyer or seller, you must include or exclude them clearly in the contract.

By reviewing and understanding the purchase contract form ahead of time you can strengthen your negotiating position, protect yourself from incurring unnecessary costs or problems, and have a better understanding of what you will need to do to conclude the sale.

For complete information about the El Dorado Hills, CA real estate market including current homes for sale, property values, and more please visit the most complete website online dedicated to everything El Dorado Hills Real Estate at http://www.livingineldoradohills.com. Please feel free to contact me with any of your real estate or mortgage related questions and I will be more than happy to answer them!

Call me at 916-502-4420 or email me at anaiman@connectrealty.com.