Buying a home is exciting, especially for first time homeowners. However, there are legal aspects to purchasing a home in Tennessee, including the execution of a real estate purchase contract. This is the contract that is drafted when the buyer makes an offer on the property they wish to purchase. The following are some provisions that homebuyers may want to make sure they include in their real estate purchase contract.
One provision that most residential real estate purchase contracts include are financing terms. After all, most people purchasing a home are doing so on the contingency that they will be approved for a mortgage at a specific interest rate. An offer should not be made if the buyer will ultimately be unable to afford the mortgage payments on the home. Even cash purchases should be documented in the purchase contract.
Which party is to pay closing costs on the home should also be included in the real estate purchase contract. If the seller is paying for some or all of the closing costs, this should be included in the contract. These payments can either be a percentage of the price the home is being sold for, or they can be a specific dollar amount.
Many real estate purchase contracts also contain a home inspection contingency clause. This is important, as it allows the buyer to back out of the deal if an inspection shows that there are major problems with the home.
Another essential component of many real estate purchase contracts is the closing date. The buyer may need time to purchase the home, for example, if they are trying to sell their old home or if they are renting and their lease is not up. If the purchase is contingent on the sale of an existing home, this should also be included in the purchase contract.
Of course, every person's situation is unique, so these suggestions may not apply to everyone. Still, it is a good idea for homebuyers to know what to include in an offer before making one. Attorneys can advise their clients on what provisions to include in their real estate purchase contract, to ensure the document meets their clients' needs.