Understanding Real Estate Purchase Contracts

Deciding you’re ready to purchase a home in Cochrane is a very exciting time! But let’s be real, it’s not just about looking at pretty houses, it can also be a bit confusing. From legal jargon to financial acrobatics, what comes with the house and what doesn’t, and of course, the paperwork party that is contracts and agreements.

So, before you eagerly sign the dotted line, let’s break down five crucial terms that every savvy buyer should understand. 

1. Closing Date: This is THE date, yay! The day you officially become the proud owner of your new home. It’s when all the legal and financial magic happens. A few days before this big day, you’ll be busy with your real estate lawyer signing your life away! Well, just your mortgage loan and property title documents. It’s also at this point when you will provide the remaining down payment and closing costs. Your trusted Realtor and Real Estate Lawyer will make sure all these details are taken care of in time to hand over the KEYS on closing day.

2. Deposit: When you submit an offer to purchase, you must also provide a deposit. The deposit amount can vary depending on the purchase price of the home – the more expensive the house, the higher the deposit. This tells the seller you are serious and qualified. Once your offer is accepted, the cash hangs out in the seller’s real estate brokerage’s trust until the closing date, and then it goes towards the grand total. Ultimately, the deposit is cash you must have on hand, and you are simply paying a part of your down payment early.

3. Offer Acceptance Date and Time: Submitting an offer is like playing a game with a ticking clock. The offer acceptance date and time are our deadlines. Both parties (buyer and seller) need to sign off on the offer by this specific moment or it’s game over, no deal. This deadline can vary, anywhere from a couple hours to a couple days. There are many factors that dictate this date and time; are we in a multiple offer situation, what is the seller’s availability to review the offer, do you as the buyer expect a counter-offer and need time to mull things over… The offer acceptance date and time is an important piece of the game so be sure to discuss your options and strategy with your Realtor.

4. Chattels and Fixtures: Ever wonder if the curtains, that fancy light fixture or that wicked fridge come with the house? Look no further than the Property Good Included/Excluded section of the purchase agreement. Chattels are the stuff you can haul away, like kitchen appliances, furniture, or curtains – unattached good. Fixtures, on the other hand, are the things physically attached to the home, like built-in microwaves or kitchen cabinets. Make sure you are VERY clear and specific about what you’d like to see stay when purchasing the home.

5. Conditions and Terms: The paperwork party where choice of wording and legal language is very important. Terms are like assurances, promises you both make but won't break the deal if they're not fulfilled. For example, the seller might promise to have the carpets professionally cleaned. If they don’t, you can still take possession on the closing date while your lawyer handles the ramifications of an incomplete term. Conditions, however, are deal-breakers if not met within a specific time frame. The most common conditions are financing, property inspection, and if buying a condo, condo document review. The typical condition timeline is 2 weeks – sometimes shorter in a fast-moving seller’s market. This gives you plenty of time to ensure your finances are locked in, have a professional inspector come check out the property, and review any documents available to ensure you know exactly what you are investing in. If you as the buyer aren’t comfortable with the results of any of your conditions, you may back out of the deal so long as you are within the agreed upon timeframe. Your deposit is then returned, and you can start shopping again!

Navigating your path to home ownership in Cochrane involves more than just envisioning your dream home and looking at those pretty houses. Understanding the terms and processes can help make this an easy and smooth transition. As you approach the closing date, be prepared with the knowledge of what you are signing, and understand the financial commitments involved.

Narrowing down these details of initial deposit, clarifying what comes with the house and meticulously outlining the terms and conditions of the paperwork - will all help shape a successful real estate journey. So, gather your newfound knowledge and lean on the expertise of your trusted Realtor, Real Estate Lawyer, and Mortgage Broker so that you can confidently buy that dream home.