So you have made an offer, if you are the buyer, and the seller has accepted it. (Generally after a bit of haggling). Now what happens?
Well here in Georgia, our Forms Committee have done an excellent job of collecting all the important information on the first page of the Purchase and Sale Agreement (This was used as an offer instrument as well). It is currently divided into 13 paragraphs and I'll briefly mention some of the more important ones. Obviously, your agent will give you valuable feedback as to what you need to fill in on the form.
- This paragraph basically lays out the fact that this is a Purchase and Sale document and the legal description of the property. This is pretty important as you can imagine. You will after all, want to make sure that your contract is for the right house and not the one next door. Generally speaking, this info is auto-populated from the MLS/tax records but you need to ascertain that it is correct.
- Survey - this indicates whether a survey is attached to the contract. I highly recommend that if not, that a survey be done prior to closing. (Perhaps old Jack next door has claimed a few feet of your property due to a faulty property line, or perhaps you want to build a wall and not give away any of your land).
- This is the Purchase Price of the property that you are acquiring.
- Closing costs. If the Seller has agreed to pay anything towards the buyers' closing costs, it goes here. (Remember that closing costs should be considered a small reduction of the selling price).
- a) Closing date - the date that the property is conveyed to the buyer. b) Seller retains possession of property through whatever time/day that parties have agreed to. (I normally suggest to my sellers that they request possession until 48 hours after closing in case the closing never happens - unlikely, but always a possibility).
- Holder of the earnest money. Usually but not limited to the selling broker. Many brokers today prefer to have the closing attorney hold the earnest money until closing.
- Closing Attorney - Name and number. Here in GA, an attorney has to close the transaction.
- Earnest Money in GA is customary and is generally an arbitrary amount. It can be paid with the offer date, or x number of days after binding agreement date. It can be paid in cash, check, or wire transfer.
- Due Diligence Period - Georgia law allows for a Due Diligence Period, during which time the buyer can inspect any part of the property and the records. This is the time period during which it is appropriate to perform an inspection by a qualified inspector and to negotiate with the seller for repairs to the house, or a cash adjustment for the repairs. The time period is negotiable but remember that it is difficult to get a good inspector within a week, so a little more time is required.
- Lead Based Paint - A brief disclosure as to the probability of lead in the house.
- Brokerage Relationships - the relationship between the parties to the transaction, eg whether the parties have brokers and who represents them. Also, whether there is any Material relationship between the licensees and the other parties.
- Time Limited Offer - this is the second most important paragraph and pertains to how long the offer is open before it expires. Once the deadline expires, there is no commitment to perform by either party.
So as you can see from a very abbreviated precis, there is a lot to be concerned about. My advice - Get a good agent!!!