Our Real Estate Blog
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When you make an offer on a home, your real estate agent will create a real estate contract, also known as a purchase agreement. Before you sign this, you should make sure you understand it. This is a legally binding agreement, and you need to be certain you’ve made the right choice. So what’s really in a real estate contract? Here are the key points it will contain.
1. The Price
The price you are offering to pay for the home is a key point in the contract. This may or may not be what the seller listed the home for. Make sure your price reflects the current market trends and the condition of the property.
2. Important Dates
Your contract will include several important dates. These include:
Target date for the closing
Offer expiration date
Deadline for certain things, like the home inspection
Choose dates that are reasonable but that give you answers soon enough to make your own decisions about the purchase of the home.
3. Earnest Money
To show that you are serious about the offer, your contract will include earnest money. This is like a deposit on the purchase of the home, and the money will go towards the purchase at your closing. If you walk away from the home purchase without just cause, the seller can keep that earnest money
Contingencies are a major part of the contract, and often one that’s the least understood. These are the conditions you’re asking the seller to fulfill before you will proceed with the contract. Contingencies may include the inspection, any known repairs needed or any allowances you want to purchase items for the home or do repairs yourself. You can add any number of contingencies to the offer contract, but they do make the contract less appealing to the seller. That said, it’s always wise for buyers to make an offer contingent on inspection, as the inspection offers important protection.
5. Additional Details
Finally, the contract will include details about who pays for the various costs of the home sale, including the title insurance, closing costs, survey and inspections. It will also contain the details about how and when the utilities will change from the current owner to the new one if the sale moves forward.
Whether you are a buyer making an offer or a seller receiving one, take some time to have your real estate agent walk you through these components of the contract. Make sure you understand the document fully before you sign it. This will protect you from making a mistake on this serious and legally-binding agreement.
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For those who intend to list a house, it helps to establish realistic expectations. That way, you'll have a good idea about what to expect during the home selling journey.
Now, let's take a look at three tips to help you manage your expectations as you attempt to sell your house.
1. Understand the Housing Market
You may own a great home, but even a top-notch residence may be difficult to sell based on the current housing market's conditions. If you allocate time and resources to study the real estate market, however, you can differentiate a buyer's market from a seller's market. Then, you can map out your home selling journey accordingly.
In a buyer's market, there may be an abundance of houses and a shortage of buyers. Therefore, sellers may need to price their houses competitively to stir up interest from buyers.
Comparatively, in a seller's market, there likely is an abundance of buyers and a shortage of first-rate houses. This means a seller probably won't have to wait long to receive offers to purchase after he or she lists a high-quality residence.
To distinguish a buyer's market from a seller's one, you should look at the prices of recently sold houses in your area and find out how long these properties were listed before they sold. This information enables you to review the level of interest in properties in your city or town and can help you determine whether you're preparing to enter a buyer's or seller's market.
2. Know Your Home's Strengths and Weaknesses
You may believe your home is flawless, but buyers may quickly identify problems with your house. Fortunately, a seller who conducts a house inspection can address any potential issues before listing his or her residence. Home inspection results may help a seller establish realistic pricing expectations for his or her house too.
During a house inspection, a property expert will examine a residence both inside and out. This property expert next will provide a homeowner with an inspection report that details his or her findings. With an inspection report in hand, a homeowner can correct underlying house issues before he or she adds a residence to the real estate market.
3. Collaborate with a Real Estate Agent
A real estate agent understands the opportunities and challenges of the home selling journey. As such, he or she will help you set expectations for this journey, as well as help you make the most of available home selling opportunities and resolve property selling challenges.
Typically, a real estate agent will meet with you and find out what you want to accomplish by selling your home. He or she next will craft a personalized home selling strategy for you, promote your residence to potential buyers and do everything possible to help you maximize your home sale earnings.
Manage your expectations as you proceed along the home selling journey. By doing so, you can limit the risk of encountering home selling problems and boost the likelihood of a successful property selling experience.