Real Estate contracts often contain various clauses and conditions. Today we’re going to explain the three that are most commonly found or requested by buyers when they’re considering making an offer on a home.
The “all-cash” condition
“The Buyer agrees to pay the balance of the purchase price, subject to adjustments, to the Seller on completion of this transaction.”
This is an “all-cash” offer which usually means the buyer is going to a bank or other 3rdparty to get all the money for the purchase of the home to give to the Seller on closing. This is often the most attractive option for the seller, so they get all their money upfront.
The financial arrangements clause
“This offer is conditional upon the Buyer arranging, at the Buyer’s own expense, a new Mortgage.”
This clause is often used to indicate that the buyer has to determine if they can arrange and obtain financing to buy the sellers home within a specified time.
Of course, your Realtor would employ more specific language, and insert details and other provisions, but for quick reference, this is a summation of what this condition would look like.
The home inspection clause
“This Offer is conditional upon the inspection of the subject property by a home inspector at the Buyer’s own expense, and the obtaining of a report satisfactory to the Buyer in the Buyer’s sole and absolute discretion.”
This condition benefits the buyer and it simply means that they are entitled to hire a professional home inspector who will ensure everything in the house is to the buyer’s safety and satisfaction.
Other provisions may stipulate that the seller must remedy any major issues, that the buyer can renege if they’re unsatisfied with the results of the home inspection.
Again, your Realtor would employ more specific language, and insert details and other provisions for this clause and customize it based on your wants and needs, as well as the condition of the home.
Keep in mind all or any number of these clauses may or may not appear in a contract, and it’s up to the buyer, seller, their respective agents and/or even independent legal counsel to agree on what is considered reasonable and acceptable when trying to negotiate a deal.
These, along with many other factors, will all be covered in future videos.
And there you have it, 3 common clauses and conditions used in residential home offers.
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