The market is changing and so are things like terms, interest rates and contingencies.  With the excitement of buying a new home or selling your home, sometimes the details are not really examined or understood fully by either party.  Please READ the contract  – it is a binding contract that, once executed, outlines the terms of the deal.  Check the boxes that are required, make sure the lines are filled in with the appropriate responses – it’s ok to ask questions!

Here is an example – on Page 1 of the Residential Purchase Contract, paragraph D discusses loans and financing.  Make sure on line 1 under First Loan you have an amount that your rate cannot exceed before financing.  Buyers might think this is not necessary because rates have been good for the past few years……but you need to have a number in that section – 5% or 5.5%.  It protects the buyer in a volatile market.  Or if the seller is requiring you to double app (meaning apply with another lender at the same time) and the rates are not favorable with the other lender, you have a way out of the deal by saying IF the rate exceeds what you wrote on that line, you can cancel and get your full deposit back.  Sellers, you should check through page 1 very carefully.  Besides checking to see if the buyer has an interest rate they will not exceed, there could be other financing terms typed in on line E that you might not agree to.  If you don’t see those things, you would initial that page and go to the next, finding out later in Escrow, you agreed to a credit toward the buyers closing costs because you didn’t see it.

Take your calculator out and do the math.  Page 1 of the Residential Purchase Contract has all the financing details, but sometimes agents make mistakes.  Take the purchase price,  subtract everything from paragraph 3, items A-F and you should have a zero at the end.  If you do not, something didn’t add up correctly!  Make sure you always check the math!

Buying or selling your home is probably one of the biggest financial deals you will do in your life.  Keep the best people by your side and ask as many questions as you need to so that you have a firm understanding of how the process works and what you are giving up or asking for in order to make the deal.  Watch out for agents, services, agencies, search engine offers that give you money back toward the purchase or sale – those agents are not the ones that really scrutinize the contracts.  I know this because I am a listing agent that sees their offers all the time.  Use me and I will guide you the right way!