If you are looking to buy or sell a home, it will be beneficial to understand everything there is to know about real estate contracts. The beginning of a real estate contract deals with the price of the home, type of financing that will be used, and the earnest money deposit. The next part of this contract has information about mediation and special provisions, such as home repairs that are needed. The last section of a real estate contract is perhaps the most important because it is about how seller concessions dictate the final net price of the home before closing.
The price of the home, type of financing, and earnest money deposit in a real estate contract
The beginning of a real estate contract includes information about the price of the property and the type of financing that will be used to complete the purchase. The total price of the home will be the financed amount after down payments are deducted.
This section of a real estate contract will also have information about the earnest money deposit at the title company, which is used to open an escrow account. This deposit is credited to the closing costs of the home.
Mediation and special provisions in a real estate contract
The next part of a real estate contract deals with mediation should there be a dispute prior to closing on a home. Mediation is offered to sellers and buyers to peacefully resolve any dispute in reference to the home before closing. This type of resolution is handled by a third party, not the buyer, seller, or their realtor.
If there are any special provisions, they will also be listed in this section of the contract. These provisions can include adding any information for repairs needed, homeowner association documents, and items not related to real estate. This section of a real estate contract is only used to represent material facts during the purchase of a home. There should not be any non-addendum-related items or special requests regarding seller concessions.
Seller concessions in a real estate contract
The last section of a real estate contract is about seller concessions. These seller concessions must be in the form of home warranty requests or closing cost assistance that is gifted to the home buyer out of the seller’s net profit on the house. This section of a real estate contract will dictate the final net price of the home before closing. You can calculate the net price of a home by taking the final price minus seller concessions for repairs or closing costs. This price is what is used when realtors search for market value homes in a surrounding area or appraisals with comparable sales.
For more information about real estate contracts and selling or buying a home, contact the Elite Real Estate Group in Amarillo. Give us a call today at (806) 337-0883 or Contact Us via email. You can also view our listings to see the homes we currently have available in the Texas Panhandle area.