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If you receive this Booklet before
you sign an agreement of sale, here are some important
points to consider. The real estate broker probably will
give you a preprinted form of agreement of sale. You may
make changes or additions to the form agreement, but the
seller must agree to every change you make. You should
also agree with the seller on when you will move in and
what appliances and personal property will be sold with
the home.
Sales Price.
For most home purchasers, the sales price is the most
important term. Recognize that other non-monetary terms of
the agreement are also important.
Title.
"Title" refers to the legal ownership of your
new home. The seller should provide title, free and clear
of all claims by others against your new home. Claims by
others against your new home are sometimes known as
"liens" or "encumbrances." You may
negotiate who will pay for the title search which will
tell you whether the title is "clear."
Mortgage Clause.
The agreement of sale should provide that your deposit
will be refunded if the sale has to be canceled because
you are unable to get a mortgage loan. For example, your
agreement of sale could allow the purchase to be canceled
if you cannot obtain mortgage financing at an interest
rate at or below a rate you specify in the agreement.
Pests.
Your lender will require a certificate from a qualified
inspector stating that the home is free from termites and
other pests and pest damage. You may want to reserve the
right to cancel the agreement or seek immediate treatment
and repairs by the seller if pest damage is found.
Home Inspection.
It is a good idea to have the home inspected. An
inspection should determine the condition of the plumbing,
heating, cooling and electrical systems. The structure
should also be examined to assure it is sound and to
determine the condition of the roof, siding, windows and
doors. The lot should be graded away from the house so
that water does not drain toward the house and into the
basement.
Most buyers prefer to pay
for these inspections so that the inspector is working for
them, not the seller. You may wish to include in your
agreement of sale the right to cancel, if you are not
satisfied with the inspection results. In that case, you
may want to re-negotiate for a lower sale price or require
the seller to make repairs.
Lead-Based Paint
Hazards in Housing Built Before 1978. If you buy
a home built before 1978, you have certain rights
concerning lead-based paint and lead poisoning hazards.
The seller or sales agent must give you the EPA pamphlet
"Protect Your Family From Lead in Your Home" or
other EPA-approved lead hazard information. The seller or
sales agent must tell you what the seller actually knows
about the home's lead-based paint or lead-based paint
hazards and give you any relevant records or reports.
You have at least ten (10)
days to do an inspection or risk assessment for lead-based
paint or lead-based paint hazards. However, to have the
right to cancel the sale based on the results of an
inspection or risk assessment, you will need to negotiate
this condition with the seller.
Finally, the seller must
attach a disclosure form to the agreement of sale which
will include a Lead Warning Statement. You, the seller,
and the sales agent will sign an acknowledgment that these
notification requirements have been satisfied.
Other
Environmental Concerns. Your city or state
may have laws requiring buyers or sellers to test for
environmental hazards such as leaking underground oil
tanks, the presence of radon or asbestos, lead water
pipes, and other such hazards, and to take the steps to
clean-up any such hazards. You may negotiate who will pay
for the costs of any required testing and/or clean-up.
Sharing of
Expenses. You need to agree with the seller about
how expenses related to the property such as taxes, water
and sewer charges, condominium fees, and utility bills,
are to be divided on the date of settlement. Unless you
agree otherwise, you should only be responsible for the
portion of these expenses owed after the date of sale.
Settlement
Agent/Escrow Agent. Depending on local practices,
you may have an option to select the settlement agent or
escrow agent or company. For states where an escrow agent
or company will handle the settlement, the buyer, seller
and lender will provide instructions.
Settlement Costs.
You can negotiate which settlement costs you will pay and
which will be paid by the seller. |