What Should Be In A Purchase Agreement?

On Behalf of | Dec 8, 2020 | Real Estate Law |

Navigating the housing market is tricky enough without the transactional details. You’ve been hunting for the perfect house in your price range, located your most desirable neighborhoods/school districts and found a property that checks all the boxes. What are the next steps? How do you make sure that you understand and are not taken advantage of? Potential New Jersey homeowners must understand how purchase agreements work.

Navigating a confusing process

One of the first steps in acquainting yourself with the home buying process is learning the jargon associated with this process. Homeowners can find themselves at a loss when entering the next phase of the house hunt. Here are the items you should check are included in a purchase agreement that buyers should familiarize themselves with:

Earnest money: This payment is the cash a buyer needs on hand to secure their right to make a sincere offer. It shows the seller that they’re serious about your interest in buying. The price can vary based on the cost of the home and the negotiations between the two parties.

Contingency: These clauses create some leeway for the buyer to back out of a purchase after completing specific actions like an inspection or mortgage approval.

Settlement date: This detail is the date that the sale is made official. The settlement date is also referred to as the closing date.

Escrow: An escrow account is where the earnest money is kept until the purchase is finalized.

Possession date: This date is when the buyers can finally move into their new home once the purchase completes.

Making the right decisions as a home buyer

Though the decision to buy a home is very much an emotional process, buyers need a certain amount of education on what they can ask for and negotiate in their purchase agreement. This education is essential for first-time homebuyers. If you’re considering buying a starter home, you need to learn as much as you can about this process.