Buyer Tips -
Purchase Agreement
If you are buying a home with another person:
learn about the different forms of ownership, because you will need to inform escrow (in writing) on how you will be taking title to your home.
Signing a purchase and sale agreement is the first big step toward buying a home: Take the time to understand all the terms and conditions. Read all the fine print. You are agreeing to spend a huge amount of money. It is also a clever idea to have your attorney review it before you sign.
Before you sign the purchase and sale agreement: make sure your lender can meet its deadlines.
Pay close attention to deadlines in all documents: Once you agree to a deadline, it is costly not to comply.
Add to the “additional comments” section of the purchase agreement: language that makes the sale subject to an appraisal amount, at or above the purchase price, to avoid last minute appraisal issues.
If closing-cost credit is being offered by the seller:
confirm, before signing the purchase agreement, that closing costs will be high enough to use the full seller’s credit, especially if the purchase price was increased to facilitate the credit. If the credit is more than the actual closing costs – any overage will need to be returned to the seller. It sounds complicated and it is. Make certain you understand everything.
Most important provisions of the purchase and sale agreement are:
the mortgage contingency paragraph, appraisal contingency paragraph, and the home inspection paragraph. They typically contain tight deadlines that cannot be missed without severe consequences.
Home Warranty Plan: You may want to ask for the seller to pay for a 1-year warranty plan policy which covers most of the components in your home such as: Plumbing, Electrical, Heating & Ventilation units, etc. (you can also add optional items such as: refrigerator, washer and dryer, freezer, etc.). If the seller is not willing to cover the cost of the plan, it is strongly recommended that you cover the cost yourself so that you will have a piece of mind for an entire year in case something should break down. Each home warranty plan requires a flat service fee to be paid at the time of the repair appointment and the average fee is around $75. Also note that a separate fee is required for each type of service call such as: electrical, plumbing, etc. as different companies will be dispatched depending on the repair type. These warranty plans can also be renewed each year by paying the renewal premium fee.
