Terms of a Real Estate Contract
A real estate contract can be a complex and intimidating document, full of incomprehensible legal jargon. And the most frightening part, for many buyers and sellers, is putting your signature on such a contract, legally binding you to an entanglement of intricate terms, clauses, and provisions. Here at the Alfriend Group, we try to simplify this for you by breaking down all of the standard terms one by one. We've created this summary to help buyers and sellers all over Central Ohio understand what they're dealing with. As always, just email us at firstname.lastname@example.org if you have any questions!
Price - Proposed sale price of the home.
Loan Type - How are the buyers paying for your home? Most buyers finance with a conventional loan or cash. Other common loan types include VA and FHA.
Loan Pre Approval - This is a letter from the buyer's lender stating they are qualified to purchase your home. Most offers allow the buyers up to 3 days to seek pre-approval.
Final Loan Approval - This is when buyer's loan must be approved by. Due to the 2015 Federal lending laws, loan approval can take up to 6-8 weeks.
Attorney Review - This is a contract contingency which gives the buyers the opportunity to have their attorney review and approve the contract. Most attorney review periods are less than 5 days.
Inspection Period - Most buyers will request a home inspection, and subsequently will request certain remedies be made to your home prior to closing. The remedy request is due at the end of the inspection period. A standard inspection period is 10 days.
Remedy Period - This is the time period after the home inspection where the buyer and seller negotiate any remedy requests made. The standard remedy period is 5 days.
Home Warranty - Over 95% of buyers in Central Ohio request that the seller pay for a home warranty for the buyers. Most warranties cost around $400-600.
Additional Terms - Any additional terms of the contract will be included here.
Included With Purchase - This section lists any items, appliances, or fixtures that the buyers would like included in their purchase of your home.
Closing - This is the date the buyers will take ownership of your home.
Duration of Offer - Unless revoked ahead of time, the buyer's offer is open until this deadline. The duration period only applies if you plan to accept the offer. Counter offers may be made after the original offer expires.