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Hi everyone! I’m Jay Lee Thompson, owner and broker of TechSell Real Estate. Today, I’m breaking down the 1-to-4 Residential Contract for Resale, essential for selling houses, not condos or multifamily units. Let’s get into all the details you need to fill out this contract correctly.
The first part is about the parties involved: the buyer and the seller. Make sure you use their full names as they appear on their driver’s licenses.
To find the lot and block, head to your county appraisal district’s website. They’ll have detailed info about the property you’re dealing with.
Improvements include any permanent additions like sheds or built-in grills. If it’s attached to the ground or the house, it’s an improvement. Make this clear in the contract to avoid later disputes.
Paragraph three is straightforward: list the cash portion of your price and the amount being financed. For example, if you’re using a VA loan, you might put down zero. Add the cash and financed amounts to get your sales price.
If you are a license holder or related to the owner, disclose it here. It’s better to over-disclose than to seem deceptive.
Earnest money is often expected within three days after the effective date of the contract. Timeliness matters. Missing this deadline can kill your contract.
Who pays for the title policy and survey is negotiable. You’ll need to specify whether the buyer or seller will cover these costs.
The buyer can state specific objections, like removing a dead tree or ensuring an RV fits in the driveway. The seller then has a period to address these.
Choose whether the buyer will accept the property as is or if specific repairs are required. Don’t just put “per inspection report”; be specific about repairs needed.
The seller must keep the utilities on for inspections. If lender-required repairs exceed 5% of the sale price, the buyer can terminate the contract.
Check for environmental issues like toxic dumping. This is especially important for properties with land that might have been used for industrial purposes.
A residential service contract can give buyers peace of mind. It covers repair costs for appliances and systems for a period after they move in.
Specify an exact closing date and ensure all agreed-upon dates fit within transaction timelines. This should be a specific date, like April 15, 2021, not a range.
Decide when the buyer will move in: upon closing or later. Sometimes sellers need extra time to move out and might request a temporary leaseback.
This section is for factual statements and specific business details, not for rewriting the contract or including complex legal terms.
Detail who pays for what at closing. Prorate taxes and other fees so that each party pays their fair share up until the closing date.
If there’s damage to the property before closing, the buyer has three options: terminate the contract, extend closing to allow for repairs, or accept the property and insurance proceeds.
If either party defaults, the other can seek specific performance or terminate the contract. It’s recommended to mediate disputes before taking legal action.
If there’s a dispute about earnest money, the title company can disburse the funds unless an objection is received within 15 days.
If the seller is a foreign person, taxes will be withheld from the sale proceeds to comply with IRS requirements.
Notices can be delivered by mail, hand, fax, or electronically. Make sure all notices are properly documented and delivered to the proper parties.
Check off any additional documents included with the contract, like a seller’s temporary lease or a lead-based paint disclosure.
The option fee must be delivered within three days of the contract’s effective date. This grants you a window to inspect the property and renegotiate if needed.
If you’re unsure about any part of the contract, consult an attorney before signing. This ensures you understand all terms and responsibilities.
In conclusion, the 1-to-4 Residential Contract for Resale is a crucial document in real estate transactions, covering every essential detail from identifying the parties involved to specifying financial arrangements and addressing property conditions. Understanding each section of the contract ensures that both buyers and sellers are well-protected and clear on their obligations, leading to a smoother and more transparent transaction.
Always remember, when in doubt, consulting with a real estate attorney can provide the necessary clarity and safeguard your interests. Happy selling and buying!
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