Whether you are deciding to buy a new home or trying to sell your existing home, you are faced with many decisions and questions. It is an exciting and emotional time and you are probably focusing on the price.
However, it is particularly important to carefully prepare and review the Real Estate Purchase Contract (REPC). It may be best to hire a real estate lawyer in this process prior to signing the REPC.
The Real Estate Purchase Contract (REPC) may also be called the Agreement of Sale for Real Estate. It is often a standard form used by the Pennsylvania Association of Realtors which may be suggested by your real estate agent. Reading through the REPC can seem challenging, but a careful review of the REPC will save you time and frustration later on in the process of buying or selling your home.
During negotiations, a buyer usually submits an offer to the seller by signing the REPC and giving it to the seller to consider. The seller can either accept the REPC by signing it without changes or can make a counteroffer by changing the terms of the REPC and giving it back to the buyer to consider. This process of negotiation may go back and forth many times before both buyer and seller have agreed to the same terms. Each time, a revised REPC may be prepared for the other party to consider.
The purchase price is probably the focus of most buyers and sellers. However there are many other contingencies and terms in a REPC that you should be careful to include or think about. One common contingency that buyers may want to include is to make the offer contingent on the sale of the buyer’s current home. If the buyer’s current property sells, then the buyer must buy the home. But if it does not sell, then the buyer can terminate the REPC and often is entitled to a return of the buyer’s deposit. From the seller’s perspective, such a contingency is not to the seller’s advantage and at a minimum should include a time limit in which the buyer’s current home must be sold.
Another contingency to watch for is a financing contingency. Even a well-priced offer is less appealing if it is contingent on the buyer obtaining financing, permits the buyer excessive time to obtain such financing, includes a small deposit, or asks that the seller pay the closing costs.
Whether buyer or seller, other things to consider, include:
-Closing date-can you move in or out by that date?
-Specific Items included or excluded from the sale? It is generally accepted that attached fixtures/appliances are included with the sale. However, in the REPC you can specifically include or exclude items
- An inspection clause-permitting the buyer to conduct radon, sewer, and a general home inspection within a certain period of time
The Real Estate Purchase Contract is an important and complex legal document. It may pay to have it carefully prepared and reviewed prior to signing. Supinka & Supinka, PC has experience in assisting both buyers and sellers with preparing and negotiating such real estate contracts and is ready to help you through this process.