First Home Buying

A sales contract is a legally binding agreement between you (the buyer) and the person or persons selling the property. This document covers everything from an overview of the sale – the price and address – to a detailed list of appliances, fixtures, and features that are included in the sale.

You should never assume that any appliance or fixture you see in the house, such as washers and dryers, refrigerators, ceiling fans, grills, or any other large “add-on” items, are included with the home unless this is specified in the contract. An appliance or fixture that goes into the contract as staying with the home is said to convey. There is usually a page in the contract where these items are mentioned; the ones that you specify by checking the box next to them (or adding them to a list if not included on the form already) must convey if the seller accepts your offer.
Negotiations

Often there will be certain parts of the contract that do not meet either the buyer’s or the seller’s desired terms. In situations where each party has its own real estate agent, negotiations take place through the agents. It’s almost like a game of telephone; the seller tells their agent, who tells your agent, who tells you. You respond by telling your agent, who tells their agent, who delivers that message (or something like it) to the seller.

It is likely that you will never have met, talked to, communicated directly with, or learned anything about the seller before you get to closing. You will know everything about their bargaining style by what their agent tells your agent; likewise, the way they perceive what you have to say will go through the same filters. This is yet another reason to make sure your real estate agent is the right one for you; it’s important for them to communicate your concerns and comments to the other side in an accurate and tactful manner.

Try not to think of the seller as an unseen enemy, even though they are probably trying to get the most for their property and your goal is to to pay only what it’s worth or less. Understand where they may be coming from; if this has been their home for a number of years they will be naturally biased toward believing it is worth every cent they want to get for it. Any sentimental value they have attached to the place only adds to its monetary value in their mind.
Getting Out

There are circumstances where you can back out of the contract without losing your earnest money deposit. If the home inspection reveals problems with the property, you can decide not to buy it based solely on the inspection results.

If for some reason you fail to obtain the proper financing for the property, you are also allowed to back out of the contract.

If the home does not appraise for the agreed-upon sales price, you can also back out of the contract.

In the aforementioned scenarios, you should be able to have your earnest money deposit returned to you. You always have the option to void a contract whenever you want, but in most cases besides the ones above you could lose a substantial amount of money in doing so.

Not only may your earnest money deposit be given to the seller if you exit the contract without good reason; any money you’ve spent on appraisals, inspections, and other costs incurred are gone. Getting out can therefore be serious business, so talk with your agent if you run into a situation that brings up doubt and find out what your options are before you act too hastily.