Housing...Inside and Out

August 11, 2000
Buying An Older Home

When buying any home ask yourself if you really want this house. Keep in mind that once you have signed a contract you are legally obligated to follow through on the purchase.

Don't be pressured into signing anything. No one wants to buy trouble especially if it's in your own home.

It is a good idea to have a lawyer review the contract prior to your signing it.

Try to negotiate on the purchase price. Often sellers inflate the asking price with a view of having it reduced in the bargaining.

Include the following clauses in your contract:

  • Plumbing, heating and electrical facilities (including air conditioner) will be in good working order at the time of settlement.
  • At settlement the seller will provide a letter from a reliable termite company that the property is free of active termite infestation. If termite damage is found the seller will repair at his expense.
  • The contract is contingent upon buyer obtaining financing within ___ days from the date of acceptance of this contract. (You may want to be more specific and include the exact loan that must be obtained.)
  • The purchaser should have the right to hire a professional inspector to determine the condition of the house. The inspection should be conducted within five working days from the date of acceptance of this contract. The inspection report must be satisfactory to the purchaser or all deposit monies will be immediately refunded and all contract obligations considered null and void.
  • Buyer will make arrangements for title search and will determine location for settlement closing.

There are times when a seller refuses to accept all contingencies. The house is sold on an "as is" basis. While this is acceptable, be very careful especially if you anticipate difficulties in obtaining financing.

You can also negotiate the amount of the down payment you put on the house. There is no set amount. In fact, you can give the seller a promissory note rather than a check.

If there is a real estate agent directly involved, let the real estate agent hold the down payment. If you are dealing directly with the seller, do not let the seller hold the down payment. You may have a hard time getting your money back if the contract falls through. Let your attorney or bank hold the deposit by putting it in an interest-bearing account with the interest coming to you at the time of the settlement.

Often a seller will tell you about items that will stay in the house such as air conditioning units, special lamp fixtures, ladders, etc. If these are important to you, list them in the contract also.


Written by Dr. Francis Graham (Retired)

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