The legal side of purchasing residential real estate is usually confusing to first-time or even second-time home buyers. The average buyer in Florida will read a purchase agreement from top to bottom and then sign it even if they do not fully understand what it says.
People tend to assume that legal contracts protect the best interests of all signing parties. However, by accident or by design, that’s not always the case.
Three examples
You can have a say about what goes into your residential real estate purchase agreement. Some beneficial contingency clauses to consider include the following:
- Due diligence contingency: This allows you to arrange an in-depth inspection of the home to uncover defects and problems. If you and the seller cannot agree on the purchase after the inspection, you can terminate the contract with little risk of financial loss.
- Financing contingency: A financing contingency gives you the time you need to secure a home loan. If you fail to obtain financing, this contingency allows you to take back your earnest money and walk away from the contract without any financial loss.
- Appraisal contingency: This enables you to have the residential property appraised. If this appraisal falls below the listed price (value) of the home, you can back out of the deal with no loss of earnest money.
Contract and residential real estate laws provide the best protection when you know what they mean and how they work. That’s why it’s crucial to find out more about them before you purchase your next home. Experienced legal guidance is always valuable.