Deciding to Sell - The Contract

The Contract

A properly written contract sets forth the terms of the sale and
protects the interests of both buyer and seller.

The contract specifies the terms of the sale and the rights and
obligations of the buyer and the seller. A well-written document
protects both parties, while a poorly drafted contract can cause
serious problems.

Get it in Writing

Oral agreements are usually difficult or impossible to enforce, so if
you've negotiated your purchase verbally make sure to have
contracts signed as soon as possible.

Attorney Review

Always make sure that any contract you sign has an attorney
review clause that allows you time (at least three business days
- preferably five) to review the document and have it checked
out by your lawyer if you feel it is necessary. Many states
specify a mandatory review period, whether it is specified or not,
but don't take any chances - make sure it's in writing. This gives
you the chance to make sure all bases are covered before you
are committed.

Choose an Attorney or Escrow Company

In some areas it is standard practice to retain an attorney to
handle the closing. In others the norm is to have the title or
escrow company handle the transaction. If you do hire an
attorney (which is a good idea), try and find someone local who
specializes in real estate closings. An experienced real estate
attorney can help you move quickly to closing and sidestep any
problems or oversights. If you are using an escrow company,
make sure that they have a solid track record.

Cover All Contingencies

Make sure that the buyer's contingencies are reasonable and that
the time allowed for any required activities or testing (i.e.
obtaining a mortgage, home inspections, etc.) is not excessive.
Reasonable contingencies are an essential part of a fair and
balanced contract - just don't let the buyer take advantage of
you.

Learn About Deeds and Title

The deed is a legal document that transfers ownership of the
home. There are several types of deed that can be used for your
transfer, as well as a number of special provisions that may
apply. Your attorney or escrow agent can answer any questions
you have on title and deeds.

Know Your Deposit Obligations

The contract should specify the due dates and disposition of
earnest money and deposits. Typically a small amount is posted
at the signing of the contract with the balance of the deposit
(usually 10% of the purchase price) due within 1-3 weeks. Make
sure that the deposit monies are posted as required - they are
your primary security in the deal.