Contract Class - Boston - March 15, 2012

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Contract Class - Boston - March 15, 2012

  1. 1. March 15, 2011 Somerville, MA March 15, 2011 Somerville, MA
  2. 2. Working with is different Technology company teamed with real estate brokers focused on customer satisfaction.Service • Advocates: client-satisfaction bonuses, not commissions • Transparency: informed decisions • Teams: Convenient scheduling, someone always available • Best Agents: the right home at the right priceNo obligation • Switch Redfin agents anytime by preference or recommendation • Tour on your schedule and pace Rebate • You get part of the commission
  3. 3. The offer/purchase process and contracts March 15, 2011 Somerville, MA
  4. 4. Tour homes Find dream home Consult with agent, write offer Submit offer to listing agent Negotiations Success! Mutual Acceptance Earnest money [$1000]Overview of a Inspection contingency [5-10 days]Purchase P&S Review and sign [10-14 days] 5% of Purchase Price [with P&S] Financing contingency [20-30 days] Walk thru [0-2 days before closing] Closing! Get keys and take possession! Receive Redfin refund Complete Redfin survey
  5. 5. Great Potential! Avoid Structural Issues! Looks Perfect!
  6. 6. This explains the lackof interior photos
  7. 7. YAY!! You Finally Found Your Dream Home… Now What?
  8. 8. Contact your agent to helpprepare an offer and strategy
  9. 9. Tour homes Find dream home Consult with agent & write offer Submit offer to listing agent Negotiations Success! Mutual Acceptance Earnest money [$1000]Overview of a Inspection contingency [5-10 days]Purchase P&S Review and sign [10-14 days] 5% of Purchase Price [with P&S] Financing contingency [20-30 days] Walk thru [0-2 days before closing] Closing! Get keys and take possession! Receive Redfin refund Complete Redfin survey
  10. 10. 2 Purchase Contracts in MA• Contract to Purchase Real Estate (offer)• Purchase and Sale Contract (P&S)
  11. 11. The Offer to Purchase• Binding contract to purchase real estate • Typically valid for 24 hours • $1000 check submitted with contract (image of check) • Verbal contracts are not binding in Real Estate• Dates (Offer acceptance forward >) • Inspection Contingency (5-10 days) • Purchase and Sales Agreement (7-14 days) • Financing Contingency (20-31days) • Closing (30-60 days)• Additional Terms • Inclusion/Exclusions – “All appliances and fixtures included in the sale.” • Additional spaces (parking/storage…) • Condo docs, budgets, minutes, assessments… “Offer subject to review and approval of condominium documents, minutes, and budget.”
  12. 12. Tour homes Find dream home Consult with agent, write offer Submit offer to listing agent Negotiations Success! Mutual Acceptance Earnest money [$1000]Overview of a Inspection contingency [5-10 days]Purchase P&S Review and sign [10-14 days] 5% of Purchase Price [with P&S] Financing contingency [20-30 days] Walk thru [0-2 days before closing] Closing! Get keys and take possession! Receive Redfin refund Complete Redfin survey
  13. 13. What to Look For When Hiring anAttorney for P&S Representation.• Do I need an attorney?• Flat Fee vs. Hourly• P&S and Lender Representation – discounted fees• Conflicts
  14. 14. Offer Letter and the P&S• Offer is a binding contract• Same basic terms carried over to the P&S• Draft P&S comes from Seller side
  15. 15. Paragraph 3: Building, Structures, Improvements, FixturesIncluded in the sale as a part of said premises are the buildings,structures, and improvements now thereon, and the fixturesbelonging to the SELLER and used in connection therewith including,if any, all wall-to-wall carpeting, drapery rods, automatic garagedoor openers, screens, screen doors, storm windows and doors,awnings, shutters, furnaces, heaters, heating equipment, stoves,ranges, oil and gas burners and fixtures appurtenant thereto, hotwater heaters, plumbing and bathroom fixtures, garbage disposers,electric and lighting fixtures, mantels, outside television antennae,fences, gates, trees, shrubs, plants and, ONLY IF BUILT INventilators, refrigerator, washer and dryer, wall oven, dishwasher,disposal, and microwave and EXCLUDING ______________________.• Make sure anything that was agreed to is included here• ONLY IF BUILT IN - STRIKE
  16. 16. Paragraph 9: Possession and Condition of PremisesFull possession of said premises free of all tenants and occupants, isto be delivered at the time of the delivery of the deed, said premisesto be then (a) in the same condition as they now are, (b) not inviolation of said building, zoning and environmental laws, and (c) incompliance with provisions of any instrument referred to in clause 4hereof. The BUYERS shall be entitled personally to inspect saidpremises prior to the delivery of the deed in order to determinewhether the condition thereof complies with the terms of thisclause.• Buyer will have a walk-through 24-48 hours prior to closing• Broom clean is the standard• Same condition as inspection with Normal wear and tear• What to bring up at closing
  17. 17. Paragraph 10: Extension to Perfect Title or Make Premises ConformIf the SELLER shall be unable to give title or to make conveyance, orto deliver possession of the premises, all as herein stipulated, or ifat the time of the delivery of the deed the premises do not conformwith the provisions hereof, then the SELLER shall use reasonableefforts to remove any defects in title, or to deliver possession asprovided herein, or to make the said premises conform to theprovisions hereof, as the case may be, and thereupon the time forperformance hereof shall be extended for a period of thirty (30)days; provided, however, that in no event shall the SELLER beobligated to spend more than $2,000.00 to give title or make thePremises so conform, exclusive of lien payoffs.• Seller has right to extend up to 30 days• Unlikely but be prepared – limit by rate lock expiration• Monetary limit on how much Seller must spend
  18. 18. Paragraph 21: Buyer’s Default; DamagesIf the BUYER shall fail to fulfill the BUYER’S agreements herein, thedeposit made hereunder by the BUYER shall be retained by theSELLER as liquidated damages, which shall be the Seller’s sole andexclusive remedy at law and in equity.• Buyer’s default – how can it happen?• How can it be avoided?• Clean commitment
  19. 19. Paragraph 26: Mortgage ContingencyIn order to help finance the acquisition of said premises, the Buyer shallapply for a bank or other institutional mortgage loan of $415,000.00 or lessat prevailing rates, terms and conditions. If despite the Buyer’s diligentefforts a commitment for such loan cannot be obtained on or before March15, 2012, the Buyer may terminate this agreement by written notice to theSeller and/or the Broker, as agent for the Seller, prior to the expiration ofsuch time, whereupon any payments made under this agreement shall beforthwith refunded and all other obligations of the parties hereto shall ceaseand this agreement shall be void without recourse to the parties hereto. Inno event shall Buyer be deemed to have used diligent efforts to obtain acommitment unless the Buyer submits a complete mortgage loan applicationconforming to the foregoing provision within two (2) business days ofBuyers’ receipt of a fully executed Purchase and Sale Agreement.• Confirm dates are realistic with Lender up front• Do not apply for more – Okay to apply for less• Clean commitment vs. contingencies• Risk of deposit
  20. 20. Additional ProvisionsThe initialed riders, if any, attached hereto, are incorporated hereinby reference.STANDARD SELLER ADDITIONS:• Purchase property “AS IS”• The ability of the Buyer to secure financing, as a condition of this contract, shall not be contingent on the sale or closing of other real estate.STANDARD BUYER ADDITIONS:• Seller representations regarding the property – “best knowledge” standard• Seller obligation to cooperate with lender• Access to property after P&S signed• Seller authority to sell• Redfin Credit – check with lender to include if taking towards closing costs
  21. 21. Repair Rider• Any inspection items agreed to• Keep separate from P&S and buyer/seller addenda• Delays and increased fees due to second appraisals, etc.• Binding contract between Buyer and Seller
  22. 22. Tour homes Find dream home Consult with agent, write offer Submit offer to listing agent Negotiations Success! Mutual Acceptance Earnest money [$1000]Overview of a Inspection contingency [5-10 days]Purchase P&S Review and sign [10-14 days] 5% of Purchase Price [with P&S] Financing contingency [20-30 days] Walk thru [0-2 days before closing] Closing! Get keys and take possession! Receive Redfin refund Complete Redfin survey

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