Selling - The Legal Issues
Once you have had a buyer make an offer and you have accepted it, you both have certain responsibilities you must live up to. There are two standard contingencies that ensure both parties are covered. There is a financing contingency - this makes the sale dependent upon the buyer’s ability to obtain a loan. If they cannot, the seller is free to open the house back up to the market. Then there is an Inspection contingency - this ensures the buyer a professional inspection of the property to their satisfaction. Once a buyer has put down a deposit, they forfeit it if they back out of the deal for any reason not stipulated in the contract.
The Purchase Agreement
The purchase agreement must include the seller’s responsibilities, such as passing a clear title, maintaining the property in its present condition until closing, and making the agreed upon repairs to the property prior to the buyer’s moving in.
Most sellers prefer to make all the minor repairs prior to putting their house on the market; this can help them endure their asking price. And nearly all purchase agreements include a buyer contingency called an Inspection Clause, whereby a buyer can back out if there are numerous defects found. It can behoove a seller to make the repairs before listing the house because a buyer can use the “needed repairs” angle to negotiate a lower price. Plus remember that once you sell, you are looking for your next house, and you do not want to have to spend all of your time fixing the house that you are moving out of.