Numerous provisions belong in sales contract


June 26, 1994|By Michael Gisriel

Q: We have just picked out a house and are ready to sign a contract. But there are many terms that we do not understand, and I am concerned that we may leave something out. What should we consider before signing?

Sylvia Hobbs, Reisterstown

A: The most important principle is this: To be binding, terms of the contract must be in writing. When in doubt, you should include a paragraph that reflects the understanding of all parties.

For example, you may believe that you will receive the washer and dryer, but the seller may intend to remove them. To eliminate any problems, the contract should state that the washer and dryer comes with the house.

Most county associations of Realtors will provide a standard sales contract. A number of provisions should be included in your contract, including:

* 1. Legal description of property, sufficient to identify the property. The contract should also describe all items that come with the house, such as appliances and curtains, that otherwise could easily be removed.

* 2. Financing terms and contingencies.

* 3. Responsibility for points or loan fees.

* 4. Responsibility for payment of examination of title and transfer and recording costs.

* 5. Deposit, and penalties if contract is breached.

* 6. Type of title (such as joint tenancy).

* 7. Adjustments for real estate taxes and utility bills, for example, bills paid in advance by the seller.

* 8. Mandatory disclosures, such as Homeowners Association, availability of water and sewer, subdivision plat and master plan information. (These disclosures vary by county.)

* 9. Type of deed to transfer title.

* 10. Insurance for house until settlement.

* 11. When possession is delivered.

* 12. Whether seller agrees to make minor repairs required by the lender.

* 13. Property's condition.

* 14. Termite inspection.

* 15. Settlement date.

* 16. Other contingencies, if any, such as sale of a house.

* 17. Who pays the real estate commissions, if any.

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