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If you receive this Booklet before
you sign an agreement of sale, here are some important points to
consider. The real estate broker probably will give you a preprinted
form of agreement of sale. You may make changes or additions to the
form agreement, but the seller must agree to every change you make.
You should also agree with the seller on when you will move in and
what appliances and personal property will be sold with the home.
Sales Price.
For most home purchasers, the sales price is the most important term.
Recognize that other non-monetary terms of the agreement are also
important.
Title.
"Title" refers to the legal ownership of your new home. The seller
should provide title, free and clear of all claims by others against
your new home. Claims by others against your new home are sometimes
known as "liens" or "encumbrances." You may negotiate who will pay for
the title search which will tell you whether the title is "clear."
Mortgage Clause.
The agreement of sale should provide that your deposit will be
refunded if the sale has to be canceled because you are unable to get
a mortgage loan. For example, your agreement of sale could allow the
purchase to be canceled if you cannot obtain mortgage financing at an
interest rate at or below a rate you specify in the agreement.
Pests.
Your lender will require a certificate from a qualified inspector
stating that the home is free from termites and other pests and pest
damage. You may want to reserve the right to cancel the agreement or
seek immediate treatment and repairs by the seller if pest damage is
found.
Home Inspection.
It is a good idea to have the home inspected. An inspection should
determine the condition of the plumbing, heating, cooling and
electrical systems. The structure should also be examined to assure it
is sound and to determine the condition of the roof, siding, windows
and doors. The lot should be graded away from the house so that water
does not drain toward the house and into the basement.
Most buyers prefer to pay for these
inspections so that the inspector is working for them, not the seller.
You may wish to include in your agreement of sale the right to cancel,
if you are not satisfied with the inspection results. In that case,
you may want to re-negotiate for a lower sale price or require the
seller to make repairs.
Lead-Based Paint
Hazards in Housing Built Before 1978.
If you buy a home built before 1978, you have certain rights
concerning lead-based paint and lead poisoning hazards. The seller or
sales agent must give you the EPA pamphlet "Protect Your Family From
Lead in Your Home" or other EPA-approved lead hazard information. The
seller or sales agent must tell you what the seller actually knows
about the home's lead-based paint or lead-based paint hazards and give
you any relevant records or reports.
You have at least ten (10) days to do
an inspection or risk assessment for lead-based paint or lead-based
paint hazards. However, to have the right to cancel the sale based on
the results of an inspection or risk assessment, you will need to
negotiate this condition with the seller.
Finally, the seller must attach a
disclosure form to the agreement of sale which will include a Lead
Warning Statement. You, the seller, and the sales agent will sign an
acknowledgment that these notification requirements have been
satisfied.
Other Environmental
Concerns. Your city or state may
have laws requiring buyers or sellers to test for environmental
hazards such as leaking underground oil tanks, the presence of radon
or asbestos, lead water pipes, and other such hazards, and to take the
steps to clean-up any such hazards. You may negotiate who will pay for
the costs of any required testing and/or clean-up.
Sharing of Expenses.
You need to agree with the seller about how expenses related to the
property such as taxes, water and sewer charges, condominium fees, and
utility bills, are to be divided on the date of settlement. Unless you
agree otherwise, you should only be responsible for the portion of
these expenses owed after the date of sale.
Settlement Agent/Escrow
Agent. Depending on local practices,
you may have an option to select the settlement agent or escrow agent
or company. For states where an escrow agent or company will handle
the settlement, the buyer, seller and lender will provide
instructions.
Settlement Costs.
You can negotiate which settlement costs you will pay and which will
be paid by the seller.
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