George Clements Greenville, SC Real Estate

George Clements ~ Greenville, SC Real Estate

Paragraph 10 is entitled "ADJUSTMENTS" and looks something like this:

10. ADJUSTMENTS: Taxes, fuel(s), rents, other fees associated with rentals, including homeowner’s association fees, will be adjusted as of the date of closing. Tax prorations are based on the tax information available on the date of closing and are to be prorated on that basis. Prorations at closing shall be final.

This section basically says that the taxes and home owner's association fees for the year will be divided up between the purchaser and the seller based on the amount of time they had the property for the year. If taxes on a property were $1200.00 and the seller lived in the house for 3 months of the year, then the seller would pay $300 towards the taxes and the purchaser would pay the rest. The closing attorney will estimate what all this will be and credit the purchaser at closing for the amount the seller would owe.

George Clements ~ Greenville, SC Real Estate

Paragraph 9 of the Contract For Sale deals with possession and looks something like this:

9. POSSESSION: Possession of said Property will be given to Purchaser ____at the time of closing, provided any net proceeds of the sale have been dispersed or ______________________________________________. Seller agrees to deliver the Property free of debris and in a clean condition. The Property, including but not limited to landscaping and/or lawn, will be maintained in the same condition from the Effective Date until possession is delivered, ordinary wear and tear excepted.

The first sentence of number 9 is basically just telling when the purchaser will take possession of the property over from the seller. The purchaser takes possession at the time of closing in almost every transaction. If this is the case, the first blank would be checked. If there were some special situation, then the second blank would be filled out.

The last part of the paragraph says that the seller cannot leave a bunch of junk at the house and needs to keep the lawn and yard in good shape. If you went under contract sometime in April and didn't end up closing until May, the seller couldn't just leave the property and let it go until it closed. This prevents knee high grass, angry neighbors, and a mess for the purchaser to clean up after closing.

Ordinary wear and tear means things like a scuff on the wall or stain on the carpet. A purchaser should not be surprised by ordinary wear and tear especially if the seller is still living there right up until the closing.

George Clements ~ Greenville, SC Real Estate

Paragraph 8 in the Contract For Sale deals with whose name the title is going to be put in and how the closing is going to take place. The paragraph looks something like this:

8.CONVEYANCE AND CLOSING DATE: Seller agrees to convey by marketable title and deliver a proper
general warranty deed, free of liens and encumbrances, except subject to all reservations, easements, rights of
way, and restrictive covenants of record on the Property (provided they do not make the title unmarketable or
materially or adversely affect the use and value of the Property) and to all government statutes, rules,
ordinances, and regulations.

The deed will be prepared in the name(s) of __________________________________________________________
and delivered to the office of the closing attorney ____________________________________or stipulated place of
closing with the transaction to be closed on or before ________ PM on __________________________________.
Seller and Purchaser authorize their attorneys and/or Settlement Agent to furnish to the Listing Broker and Selling Broker copies of the preliminary and final HUD-1 Settlement Statement for the transaction.

The first sentence is basically saying that the seller is selling the property without any problems connected to it. The title search that the closing attorney has done should show if there are any problems like this. Liens mean anything that is owed on the property like loans or work that has been done but not paid for. It is fine for a property to have easements, right of ways, and covenants as long as they don't hurt the property so much that it is not marketable. For instance, if there was a huge drainage easement owned by the city that went under a home that the city could get access to at anytime by going through your home, this would make an unmarketable title. A lender would not give you a loan in this situation.

The second sentence just shows how and who's names will be put on the title for the purchaser and who the attorney will be. It also gives a closing time. Based on the wording, the closing could take place before this time but has to happen by this time. If a closing is delayed for whatever reason, a contract extension needs to be signed.

The third sentence says that the agents have the right to review the HUD for the people they are representing. the HUD is just a break down of all of the costs associated with the transaction. It breaks down both the purchaser's and seller's costs and shows how much money each one brings or gets.

George Clements ~ Greenville, SC Real Estate

Paragraph 7 of the Contract For Sale deals with closing costs. The paragraph looks something like this:

7. CLOSING COSTS: All expenses necessary for the consummation of this sale, unless otherwise agreed
herein, will be paid as follows: (a) Seller will pay for deed preparation, deed recording fees, costs associated
with mortgage payoff and satisfaction and any cost not allowed to be charged to Purchaser by the Lender; (b)
Purchaser will pay discount points, all non-recurring closing costs, prepaid items, Private Mortgage Insurance,
FHA-MIP or VA Funding Fee, if applicable. Other terms: ______________________

This paragraph spells out which closing costs the seller is paying and which closing costs the purchaser is paying. If nothing is written in the "Other terms:" section then the purchaser will be required to pay all of their own closing costs. These include but are not limited to loan fees, pre-paid fees required by the loan, reserve deposits like taxes and insurance, title charges (attorney fee, title search, document preparation), and inspection fees.

When it comes to the seller paying for the purchaser's closing costs it is all about the seller's bottom line. To a seller, $100,000 for a property and $103,000 with the seller paying $3,000 of the purchaser's closing costs is the same thing. Either way, the seller gets the same net figure. If you are wanting the seller to pay your closing costs there are good clauses to use that make sure that everything is covered. George can fill this in at "Other terms:" when helping write up the offer for you.

George Clements ~ Greenville, SC Real Estate

Paragraph 6 of the Contract for Sale is named "LOAN APPLICATION." The paragraph looks something like this:

6. LOAN APPLICATION: Purchaser agrees to apply for financing, as required above, from the Lender of his
choice within ____calendar days after the Effective Date and to provide all documents or information requested
by the Lender in a prompt and timely manner. At the time of application the Purchaser will advance the
necessary money to process any financing. Purchaser will take any reasonable action which is needed or
requested by the Lender to process the loan application. Purchaser hereby gives permission to Lender to
disclose pertinent information concerning the Purchaser’s credit-worthiness or any other information needed for
the loan processing to the Listing or Selling Broker(s) or Agent(s).

This paragraph is for those purchasers who are obtaining a loan and is basically saying that the purchaser needs to get the loan process going as soon as possible after the contract is complete. The loan process is one of the biggest things that need to happen from the time of completed contract to closing and usually takes the longest of anything. It is important to get this started so that the closing is not delayed. Normally, the blank is filled in with something like "5" calender days to do this.

The last sentence gives permission for the agents involved to get find out from the lender if the purchaser is financially able to purchase the property. This is important because a seller does not want to tie up the property under contract for a month or so only to come to the closing and find that the purchaser is not able to get financing. Most sellers want to see a preapproval letter before they even consider an offer. A preapproval letter can be obtained from any lender you are working with.