STEP ONE: GOING TO CONTRACT

If you listed your property with a realtor, the buyer's agent will present a standard form contract when making an offer on the house.  The Contract contains pertinent terms of the deal, like the price, mortgage amount, closing date, and if any fixtures are included or excluded from the sale.  Once the real estate agents negotiate the terms, you sign the contract and the realtor delivers it to the buyer's agent.  

 

If you sell a property without a realtor, we, as your attorney, prepare a purchase and sale contract for you.  In that event, it is not signed until it's fully negotiated.  

 

ATTORNEY REVIEW

Once the parties fully sign the contract with the realtors, attorney review begins.  By law, both the buyer and seller have three days to have their attorneys review the contract.  If the attorney wishes to change any part of the contract, he or she must write a letter "disapproving" the contract within three days.  This letter has the legal effect of canceling the contract.  However, through the attorney's disapproval, finer points of the contract are negotiated, as well as any other concerns of the parties.   The attorneys will prepare an addendum to the contract incorporating all the negotiated changes.  Once the addendum is signed, the contract is reinstated (as amended) and is binding on the parties.  

 

A common misconception is that attorney review must be completed within three days; this isn't true.  Rather, it must be initiated within three days.  Thereafter, there is no specified time period for completion of the attorney review negotiations, although it is usually preferable to complete the process as soon as possible.  

 

THE MORTGAGE AND HOME INSPECTION CONTINGENCIES

The contract will typically provide that the sale is contingent on the buyer obtaining a mortgage loan within a certain time frame, and upon satisfactory home inspections.  If the buyer is legitimately denied a loan, he/she will have the right to terminate the contract and receive a refund of the purchase deposit. 

 

The buyer has the right to have the home inspected has the buyer's expense to identify any structural, mechanical or environmental defects in the property.  Although the contract states the sale is "as is," if the inspection reveals any of the aforementioned defects, and if the seller refuses to correct those defects, the buyer will have the right to terminate the contract and receive a refund of the deposit.  Repairs for any defects discovered during the home inspection will usually be negotiated by the attorneys.