5 Things To Look For In A Contract When Buying A Home in 2023

When it comes to selling your home, the contract plays a vital role in ensuring a smooth and successful transaction. However, there are certain elements that can easily be overlooked, potentially leading to complications down the line. In this blog post, we will highlight five key things to watch out for in a contract when selling your home. By paying attention to these crucial details, you can protect your interests and ensure a favorable outcome.

1. Contingency on the Buyer Selling a Home: One of the first things to look for in a contract is whether the offer is contingent upon the buyer selling their own home. While accepting such an offer may sometimes be necessary under specific circumstances, it's generally advisable to avoid it. The inclusion of this contingency may involve additional forms or could be as simple as one line in the contract. To prevent any surprises, it is essential to be well-informed and aware of whether the offer is contingent on the sale of a buyer's home.

2. Small Deposit: Another important consideration is the amount of deposit the buyer is putting down. This deposit is not the down payment used by the buyer to secure financing but rather the earnest money that initiates escrow. Ideally, the deposit should be around three percent of the purchase price. If the buyer were to default on the agreement, a higher deposit provides more leverage for the seller. Conversely, a small deposit may not be sufficient to deter the buyer from walking away.

3. Cash Offer with a Long Escrow: When presented with an all-cash offer accompanied by an extended escrow period, it's crucial to exercise caution. The source of the cash should be verified and vetted thoroughly. This ensures that the funds are indeed available. Longer escrow periods in cash transactions can raise concerns, and it is essential to ascertain the legitimacy and stability of the buyer's financial position.

4. Extended Inspection Contingency: Inspections are a standard part of the home selling process. However, it is important to note the duration of the inspection contingency outlined in the contract. While the contract typically defaults to a 17-day inspection period, it is advisable to aim for a shorter timeframe, such as seven to ten days. Granting extra time for inspections is a possibility but commencing with a shorter contingency period is often more desirable for a timely and efficient transaction.

5. Additional Terms and Blank Spaces: The final consideration relates to the additional terms section and any blank spaces within the contract. Careful attention must be paid to these areas, as overlooking them can lead to unexpected surprises. Examples of issues that may arise include undisclosed credits for closing costs, requests to vacate the property in a certain condition, or the inclusion of personal property not typically part of the sale. Reading and understanding the fine print in these sections is essential to avoid misunderstandings and ensure a smooth transaction.

Conclusion: Selling a home involves numerous details, and the contract is a critical component of the process. By keeping a watchful eye on specific contract elements, you can protect your interests and minimize the risk of encountering unexpected challenges. Remember to thoroughly review the terms related to contingencies, deposits, escrow periods, inspection timelines, and additional clauses. By dotting your i's and crossing your t's, you can confidently navigate the contract process with your real estate agent, ensuring a successful home sale.