It is the custom and practice in most counties in Connecticut for the Realtor to prepare the Real Estate Purchase Contract on behalf of a Buyer. These forms are preprinted by each county’s Board of Realtors. Of course, with any preprinted forms, there are several blank spaces, which the Realtor needs to fill in, all of which are based upon the information that you discuss with the Realtor.
I am a big advocate of using these preprinted forms for the purchase and sale of real estate in the State of Connecticut. I believe that these forms are fair to both Buyer and Seller, and in most every circumstance, address all the important issues relevant to the transaction. They are in plain language, and they speed up the process of concluding the contract stage of the purchase. I caution you however, to make sure that you understand the contents of the agreement and carefully complete the contract with your Realtor. Below are several tips for you as a Buyer to remember.
The contract asks for your name and current address. While this seems like an insignificant point, the name that you put on the contract will follow you for the rest of the transaction. As simple as it sounds, is to make sure that your name appears on the contract in the way in which you want all formal documents to read.
Included in the contract is a paragraph indicating what fixtures and personal property are included in the sale. While some items are considered fixtures, and automatically stay with the house, I consider it wise for you to list any major items that are included in the sale. Washing machines and dryers are particularly items that are often omitted and the Buyers and Sellers wind up in combative discussions as to who is the owner of them.
Take particular care in writing out the financial offer in the contract. Make sure that you have sufficient funds to pay the initial deposit as well as the subsequent deposit required after the contract is fully executed. I suggest that the initial deposit be the sum of Five Hundred Dollars ($500.) to One Thousand Dollars ($1,000.) and that the remaining deposits required are submitted after full execution. You may ask for a closing cost credit. Not all closing costs are permitted by your mortgagee to be reimbursed by the Seller. Address this to your mortgage consultant. Remember that despite whatever is told to you, it is most unlikely that a closing-cost credit can exceed your actual closing costs exclusive of short-term interest, tax payments and tax escrows. Make sure to specifically delineate any credits for repairs, the amount of such credits, and be prepared to have paid bills at the closing.
You will need guidance in determining the dates to fill in for the mortgage contingency date (the date upon which you must obtain a mortgage commitment) and the closing date. Use a realistic mortgage contingency date. I suggest 30 days, and a closing date approximately 15 days after the mortgage contingency date. This gives you a total of about 45 days, which I consider to really be the bare minimum.
The contract also provides for inspection contingencies. These inspections include a home inspection, a termite inspection and an environmental inspection for asbestos and radon. None of these inspections are necessarily required by your Lender (FHA loans typically require both a home inspection and a termite report). Fourteen days is typically sufficient to conclude these inspections. If any of the inspections come back unsatisfactory to you, then the contract provides for you and the Seller to come to a mutual agreement as to how to resolve them. Keep in mind that the Seller need not make any concessions to you, and then your only recourse is to either continue with the purchase as is or terminate the agreement.
If you are purchasing a condominium, cooperative or planned unit community, there will be a Rider to the Real Estate Purchase Agreement which sets forth other obligations of the Purchase and Sale Agreement. As a Buyer, this means that you must be given a Resale Certificate and a copy of the By-Laws before you are obligated to purchase. Additionally, if there is a right of first refusal of the Association to purchase the Unit, the Seller must comply with the requirements and get a Waiver of the Right of First Refusal. The Resale Certificate and Public Offering Statement will give you valuable information regarding the common interest community. Read the rules and regulations to make sure that you understand them. Additionally, the Resale Certificate will give you a financial report of the common interest community, which is important for you to review so that you understand its financial condition. If the common interest community is in poor financial condition, it is more likely that future assessments may occur.