SW
Purchase agreements can be difficult to understand and even intimidating if you don’t know what they contain. I always recommend having an attorney review these documents before signing. If you aren’t an attorney, here are some items you should be aware of and locate on the purchase agreement as they will have a big impact on you.
Closing Date. Does the closing date giving enough time for financing to be completed? Will the closing date have an impact on your tax situation? Typically financing takes up to 30 days after the purchase agreement has been signed. Any government program may take longer.
Taxes. How are the previous and future year taxes being paid? If you don’t get access right away or will miss out on some of the income potential that year, sellers may be paying all the taxes. Often the tax bill is prorated between buyer and seller.
Down Payment. What is the required down payment to the seller when the purchase agreement is signed? When is this payment due? You may need to make an initial payment or earnest deposit which could be tied into your long-term financing later.
Fees. Will seller be covering of some of the fees? Closing fees could be split 50/50 or paid 100% by the buyer depending on terms.
Easements. Are there any easements on the property or is an easement needed to have proper access? Check with a realtor or attorney to make sure there isn’t anything unique about the property that could cause legal trouble later.
This is not legal advice. Please consult an attorney.
Have a great week!
Grant Wiese