A Buyer's Guide: Understanding the Contract

This is the address and any personal property of the seller’s you’d like to buy

The purchase price of the property

How much you’ll give to the seller if you decide to terminate the contract for a reason not stipulated in the contract

A cash equivalent of how much the seller will give back to you at closing, reducing your cash to close

Similar to homeowner’s insurance for interior items such as broken appliances, leaky faucets, etc. that is often paid for by the seller

Describes how taxes and fees will be prorated at closing

Each party will be responsible for his or her own real estate agent

These clauses are the reasons that allow buyers to terminate the contract without repercussions. Common examples include financing, appraisal, and inspection contingencies

This contingency allows you to walk away from the sale in the event that you’re unable to obtain financing

If the property doesn’t appraise for at least the sales price, you’ll be able to terminate the contract

If you and the seller are unable to agree on terms about the repairs that need to be done, you’ll be able to walk away from the sale and still receive your EMD if you have this contingency

In the event that radon levels are higher than the recommended limit, you will receive your EMD if you decide to end the agreement

Should termites or termite damage exist, you will be able to walk away from the contract

Settlement is the date you legally own the property, and possession is the date you take the physical property. These dates are not always the same, depending the circumstances of the buyer and seller. 

This section ensures that you’ll receive a clear title before closing. If you’re obtaining a loan, you will likely need to obtain title insurance prior to settlement

This is information provided by the seller about a property that may affect your interest in purchasing the property. Requirements exist at all levels of government and vary from state to state

In Virginia, buyers are permitted three days after receipt of the Association Disclosure Packet to terminate the contract

In Virginia, buyers are permitted three days after receipt of the Resale Certificate to terminate the contract

Disclosures required of Sellers varies widely state by state. Disclosures are notices about the property. It’s critical that you read these as these problems become your problems. 

Anything else you or the seller would like to add to the contract

This is not generally a negotiated clause. Rather, the buyer has the option before closing to pay a surveyor for a map and legal description of the property.

This is a note to the seller and is not legally binding