More things you MUST know about Real Estate CONTRACTS

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There are some more VITAL parts of real estate contracts of which you MUST be aware.

It is illegal for ANYONE, agent , seller , HOA, lender or any service provider to discriminate against you on the basis of race, color, creed, familial status, handicap, marital status, sexual orientation or gender in a real estate transaction.
If you feel you have been unfairly treated under the federal Equal Housing Opportunity law, IMMEDIATELY contact the Secretary of Housing and Urban Development (HUD) and your State legislators!

County and/or City Transfer Tax: If there is a government real estate transfer tax due on the transfer of ownership, you need to make sure you know who pays it.
Typically this is a seller's expense as they are the one who is transferring title.
Check your real estate contract and ask your Realtor®.

HOA Disclosures: A lot of houses nowadays are part of a planned unit development (PUD). These developments have Associations which govern such things as what color you can paint your home, how you landscape, what type and size of pets you may have et., etc.

Homeowners Associations charge a monthly fee, so be sure to find out how much, and figure the expense in to your monthly bills.
Some of these Associations are very restrictive so, before your contingency period is up, you should have been given, read and approved of the Association Byelaws.
If you don't think you can live within them, cancel your real estate contract NOW!
Most HOA's charge a document preparation fee to provide you with this info if the seller does not give you their copy.

HOA Transfer Fee: Be advised that there could also be a HOA mandated transfer fee.
Ask your Agent who traditionally pays this in your area.

Liquidated Damages: Some real estate contracts contain a clause calling for liquidated damages.
What this means in a nutshell is, should you back out of the deal for no legitimate reason, then the seller gets to keep your earnest money deposit.
This clause also limits the seller's ability to go after you claiming more substantial damages.
Ask your real estate agent to explain this more thoroughly.
California limits this amount to no more than 3% of the offer price. Check your State laws.

Mediation: In some real estate contracts, there is a mediation clause which kicks in if there is a dispute that can't be resolved between the parties to the transaction.
Mediation means that before going to court, you have to resort to having your dispute settled by an independent mediator.
Usually, mediation is not binding but a good faith effort at resolution by all parties involved.

Arbitration: If a dispute is not settled by mediation, then the next step to avoid costly legal and court fees is Arbitration.
Just like mediation, arbitration is an attempt to settle disputes by an independent arbitrator, usually a retired judge, lawyer or other person with familiarity of real estate law.
Unlike mediation, arbitration is BINDING on all concerned.
If you have agreed to the arbitration clause in your real estate contract (if there is one) then you are giving up your right to pursue action in court.
Read any arbitration clause very carefully before agreeing to it.

Transfer Disclosure Statement: In California the seller of 1-4 units or homes is required to give the prospective buyer a real estate transfer disclosure statement.
This disclosure is a statement by the seller and also their agent, listing all KNOWN defects and/or conditions affecting the home and property.
Do NOT rely on this instead of having a HOME INSPECTION as it is only a statement of what the seller supposedly knows.

FIRPTA: Foreign Investment in Real Property Tax Act is a federal law that requires the buyer, under certain circumstances, to withhold up to 10% of the purchase price for taxes.
You should be aware of this although, if required, the Escrow or Settlement Company normally does this for you.

More things you MUST know about Real Estate CONTRACTS

There are some more VITAL parts of real estate contracts of which you MUST be aware.

Now let's get out of here to a more interesting page, HOME INSPECTION

Now let's get out of here to a more interesting page,
HOME INSPECTION