|Essential Contract Clauses Part I
Congratulations! You just purchased that new home study course. You followed the instructions. You found
a good deal. You present your contract to the listing broker, and you get laughed at!
The reality is, real estate brokers don't like "seminar" forms. They are comfortable using
the "standard" agreement, although the standard agreement is usually drafted to protect
the real estate broker, not you.
You must learn how to take any "standard" agreement and modify it to your liking. The
following are some essential clauses I use when buying a property:
And/or assigns or and/or Nominees
As the buyer, you want to have the right to assign your contract. By placing your name with the
words, and/or assigns, you automatically give yourself that right. The words, and/or
nominees is not as broad, but it has been interpreted as giving the buyer the right to place
title in the name of a trust
NOTE: If the contract contains an "anti-assignment" provision, you must cross that clause
Have the right to make the contract contingent upon your right to do a thorough inspection before a
certain date. Make certain that you are not required to hire a professional inspector and that the
inspection clause permits you to cancel the contract if there are things wrong with the property
which the seller is not willing to fix or reduce the price.
Choice of Escrow Company
As the buyer, insist on the right to choose the title or escrow company so that you remain in control.
A conservative or uncooperative escrow or title company can make life very difficult if you are
trying to do a creative deal.
Right to Extend
Most contracts call for a date certain for closing. If the buyer is not ready to close, the seller
can hold him in default. Here are some tips for buying time:
- Make the closing date on or about June 1st. What does on or about mean?
Im not sure, but it certainly means LATER than June 1st!
- Have the right to extend the closing date if it is not your fault: Said date may be extended
an additional fifteen (15) days if lender requires additional documentation, paperwork or actions from
the buyer and said delay is not due to the fault of the buyer.
- Have the right to extend for thirty days by paying the seller the equivalent of one months
Copyright 1998 All Rights Reserved. No part of this publication may be copied
or reprinted without the express written permission of the Author.
William Bronchick, Esq.
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