Buying Your Katy-Cinco Ranch-Richmond Area Home For The Best Price!
Katy-Cinco Ranch-Richmond Area Home
For The Best
Chapter 16 What Clauses You Might See In Your Purchase Contract For Your New Home
Fred Miller, Realtor serving Katy, Cinco Ranch, Pecan Grove, Richmond,Westpark Tollway, Fulshear www.RichmondKatyHomes.com
Just so you will know what to expect below are a few of the primary clauses that will be in your Residential Contract (Resale). Each clause may be different for each person to some degree. Unless an attorney is employed all agents use the contract promulgated by the Texas Real Estate Commission.
Paragraph 3 shows the amount of cash to be paid at closing, the amount to be financed and the total sales price.
Paragraph 4 and the Third Party Financing Condition Addendum spells out the financing conditions under which you are willing to purchase. That is, the contract is subject to your being able to obtain financing under these minimum conditions; if these conditions are not met you can cancel the contract and get your Earnest Money back.
“Third Party Financing: One or more third party mortgage loans in the total amount of $____. If the Property does not satisfy the lender’s underwriting requirements for the loan, this contract will terminate and the earnest money will be refunded to Buyer”
“Buyer shall apply promptly for all financing described below and make every reasonable effort to obtain financing approval.”
“Conventional Financing: A first mortgage loan in the principal amount of $_____ due in full in ____years with interest not to exceed__ per annum for the first _____years of the loan with Loan Fees not to exceed___% of the loan. The loan will be with? or without? PMI.”
Paragraph 9. “The closing of the sale will be on or before _________, or within 7 days after objections to matters disclosed in the Commitment or by the survey have been cured, whichever date is later.”
Paragraph 13.” Taxes for the current year, interest, maintenance fees, assessments, dues and rents will be prorated through the Closing Date.”
This is the option clause.
Paragraph 23. “Termination Option. This paragraph will be a part of this contract only if both blanks are filled in and Buyer has paid the Option Fee. Buyer has paid Seller $_____(Option Fee) for the unrestricted right to terminate this contact by giving notice of termination to Seller within _____ days after the effective date of this contract. If Buyer gives notice within the time specified, The Option Fee will not be refunded, however, any earnest money will be refunded to the Buyer. The Option fee will be credited to the Sales Price at closing. For purposes of this paragraph, time is of the essence; strict compliance with the time for performance stated herein is required.”
Please note that the Option Fee is paid up front. You have the right to get out of the contract for any reason and not lose your earnest money, losing only the option money. If the contract goes into full effect, your option money will be applied to the purchase. Strict compliance with the time period is in effect; this is “make up your mind during the specified period”. You are paying this person for the right to “tie up” his property for 5 to 14 days.
( Nothing in the this article is meant to give legal advice. Real estate licensees con not give legal advice. If you have legal questions concerning real estate or contracts please consult an attorney. The above definitions are different from the strict legal definitions, but are given in the hope of making the concepts more understandable to the initiated.)
Call us for a free copy of an earnest money contract and financing addendum at 281/762-2213
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The information contained in this site is the opinion of Fred Miller and does express any policy or opinion of Re/Max International, Rd/Max of Texas or Remax Plantation.