Purchasing real estate is one of the most significant financial commitments many people make, and the purchase contract is the foundation of the transaction. While every deal is unique, there are several provisions that buyers should review carefully to avoid costly surprises. Below are just a couple of provisions that should be included, but is not an all-encompassing list.
One of the most important is the attorney review period. With an attorney review period, buyers and sellers are given a limited number of days, typically three to five days, to have their attorneys examine the contract. During this time, your attorney can propose modifications, address ambiguities, or raise objections. Missing this window can lock you into unfavorable terms. If you don’t have an attorney reviewing the contract prior to signing, it is vital to ensure sufficient attorney review provisions are included in the contract.
Another critical provision involves contingencies, such as financing, inspections, and appraisal. These clauses allow you to walk away or renegotiate if you cannot secure a loan, if the home inspection reveals significant issues, or if the property ap-praises below the purchase price. Ensuring timelines and conditions are clearly defined provides valuable protection.
Buyers should also pay attention to the ear-nest money deposit requirements. This determines how much is required for the earnest money deposit, when it is due, and under what circumstances it may be forfeited.
Two more provisions deserve careful review. The title and survey section should confirm that you will receive clear title and that boundary lines or easements do not interfere with your intended use. Similarly, the default and remedies clause specifies what happens if either party fails to perform, includ-ing potential damages or forfeiture of deposits.
Working closely with counsel during con-tract review ensures your interests are safeguarded and the path to closing is smoother.
