Time and time again, homeowners are being burned when selling their homes to fly by night home buying companies.
They bank on the fact that most sellers do not fully understand a real estate contract.
Cash House Buyers USA is here to educate you on the ways to identify a scam and protect yourself from deceptive strategies other companies may use in a contract to purchase your home.
Here are some key sections to look out for in a real estate contract:
Section three, the sales price of your home.
It may go without saying, but be sure to make note that it is, in fact, the price that you agreed upon. Section five, earnest money. For a contract to be valid, earnest money must be deposited within three days from the date signed, also known as the effective date of the contract. The title company contact information, as well as earnest money amount, should be listed here.
Section six, title policy and survey.
There are quite a few sections within the contract where buyers can sneak in closing costs for a seller. This is one of those areas. It is a big expense, so be sure to check this section carefully.
Section seven, condition of the house.
Another section where buyers can add more money for you to have to provide at closing is in section seven, property condition. Other companies buying homes will list repairs here, and the seller is required to complete those repairs before their home can close.
Cash House Buyers USA buys every home as-is, so sellers do not need to worry about this section with us.
Section 8, brokers’ fees.
This section lists the real estate agent’s fees. With Cash House Buyers USA, we do not use a realtor to represent us, so there will never be an expensive broker fee.
Section 9 is your defined closing date.
It is required to be in place so that all parties, including the title company, know when the sale is finalized so the seller may receive funds.
Section 10 is important.
It is customary for a home to be vacant on the day of closing. However, with Cash House Buyers USA, we understand the moving process doesn’t always go as planned. We may be to offer a lease back in some circumstances if needed.
Sellers, beware of section 12.
Settlement and other expenses is an ideal place for buyers to hide more closing costs for a seller. Again, in selling with us, there is never closing costs for the seller.
Section 13 is another area worth
taking a close look at.
Proration means the seller is responsible for the property taxes on a home for the portion of the year in which they own the home. For example, if the home is to be sold February 1, the seller is responsible for the first month of property taxes as long as the prior years are current.
Be sure to take a close look at section 22,
agreement of the parties.
Home buying companies like to sneak in self-created addendums with hidden terms that will allow them the right to back out of the contract at any time.
It is important to avoid these if you want to sell your home and you want it to be final as expected. Cash House Buyers USA does not use these self-created type addendums.
The final section to look out for
in section 23, termination option.
This section also allows the buyer to terminate the contract and back out for any reason whatsoever. Again, we do not require an option period.
We want our sellers to have the peace of mind that their sale is going to take place as promised.
So, there you have it, red flags to look out for in a real estate contract.
Don’t fall prey to an unethical home buying outfit.