Tampa Real Estate Contracts
Real estate attorneys from Fuentes & Kreischer, PA in Tampa provide information about real estate contracts to help buyers and sellers understand their obligations under the law.
Making an Offer to Purchase a Home
Buying a home is a very exciting time of your life. Getting caught up in the excitement is normal, even if you've owned a home before. When you find a Tampa property and want to make an offer to purchase it, you need to prepare a contract of sale. There are many considerations you need to decide before you prepare the contract such as purchase price, down payment, and terms.
Read the Seller's Property Disclosure
The Seller's Property Disclosure is a document completed by the seller which notes when repairs, treatments, and/or modifications were made to the home and property. You should take the time to read the Seller's Property Disclosure before you have a contract prepared. For example, if the roof is 25 years old, you may ask to deduct the cost of a new roof from the purchase or after the home is inspected.
Determine the Purchase Price
If you are working with a realtor, he or she should provide you with recent home sales that are comparable to the home you want to purchase. This information will help you decide the starting point for your offer. You should leave room for negotiating the purchase price. It's customary for the parties to counter each other's offer until both are comfortable with the purchase price.
How much of a deposit is necessary?
The money you use for a down payment to purchase the home is called earnest money. It can be cash or a check. If you are contributing cash at closing instead of a mortgage, you should include a copy of your bank statement with the contract. Your offer to purchase will be stronger if your down payment is substantial. If you offer a larger amount as a deposit, the seller will think you are more committed to the transaction. However, you should not empty your savings account as a down payment because you may need money for repairs, closing costs, or an emergency.
Limit your Risks
A contingency is a protection included in the contract that will limit your risk if you decide to cancel the contract. For example, a contingency may be you need to sell your present home before you purchase a new one.
Other contingencies are appraisal, mortgage, and inspection protections. An appraisal will be ordered by the bank to ensure they are not lending you more funds than the property is worth. A mortgage contingency protects your down payment in case you cannot get a mortgage. Unless you are paying cash, if you cannot obtain a mortgage you cannot buy a home. An inspection contingency allows you an escape route if you find the home has defects that you don't want to assume.
We hope that before you got into a realtor's car to look at homes you spoke with a reputable lender about how much of a mortgage you can afford. The lender will check your credit and financial data and prepare a mortgage pre-approval which your realtor should provide to the seller along with your offer.
The real estate contract will define your loan specifications such as the amount of mortgage, type of mortgage, and closing date. Your lender will review closings costs with you.
Understand the Contract Before you Sign
The most important advice our Tampa real estate lawyers can tell you is to understand the different parts of a real estate contract before you sign it.
If you are in the process of looking at homes and would like to speak to us about a real estate contract and how to limit your risks, contact Fuentes & Kreischer at 813-933-6647, or complete our web form. We have been representing individuals and families in real estate transactions for over 30 years, and would like to represent you.