Important sections and bargaining points in the sales agreement

Important sections and bargaining points in the sales agreement

Important sections and bargaining points in the sales agreement

 

# Entrepreneur of the Week, Tax Post 2: Important sections and bargaining points in the sales agreement.

So as I wrote in the first post, purchase / sale agreements in most US countries are structured, uniform agreements (as is) very different from Israel. However, there are a number of clauses and variables that can be negotiated and it is very important to pay attention to them. beginning, Pre-test section - due diligence או inspection period. It is important to make sure that this option is not waived. It is also important to fill in the number of days you request in order to complete all the tests you wish to do. Remember, cancellation of the agreement and the down payment, as long as they are done within the pre-test period, do not involve any penalty and you can cancel the agreement for any reason. After the end of the test period under the contract, it will be much more difficult to cancel and the seller will be entitled to the down payment you paid.

Another important item to note is the section that should indicate whether the transaction is a cash transaction (cash deal) And not… The intention is not to come to the closing table with a suitcase full of bills (a case that really happened to me years ago), but to purchase without financing, or a deal in which you intend to take out a mortgage. Please note that when it comes to a financing transaction, you must explicitly state in the agreement which mortgage you intend to apply for and under what conditions and of course the contract depends on the approval of the financing agent, which you must provide within the time limit in the contract.

Another issue to note is an issue Seller's statements and defects. There are some states where many of the homes were built decades ago from materials that are now known to pose a real health risk and in that state the law requires the seller to provide a verified statement and disclosure to the extent known for the inventions of hazardous materials such as: asbestos, lead paint, etc. Realtors are familiar with the issue and should make sure that all relevant affidavits and appendices are signed and attached to the contract, but I have come across a lot of cases that are obscure and / or inconsistent.

how can we help you? Down payment- I recommend transferring the down payment to a neutral party in the transaction, such as the title company that was determined to carry out the closure, the real estate agency on your behalf, or an American lawyer on your behalf. It is not recommended to transfer an advance or any other amount directly to the seller or in case you make a purchase through an entrepreneurial company in Israel, directly to the company or someone on its behalf. Of course, the purchase amount at the end of the process must also go through a trustee or directly to the title company for the purpose of closing (I will expand on this topic later this week when I explain the meaning and importance of the title company).

Another bargaining point that is important to note is an issue Closing costs And to whom they apply under the agreement. It is important to make sure which option is marked in the uniform contract and keep in mind that everything can be argued. In most cases they will try to determine that all closing expenses apply to the buyer. Optional. It is possible and necessary to bargain and burden costs such as a property insurance policy (title insurance), typing fees, title checks - on the seller. There are of course costs that regularly apply to the buyer however there are some as I mentioned that one can definitely demand that the seller bear them. In many cases the seller will insist that the closing be done by a title company or a title agent on their behalf. In most cases there is an option in the agreement to choose whether the seller chooses, and then also pays, if the seller is only obligated to transfer to the buyer a title insurance title and the buyer does his checks, or the buyer chooses a title company. On this subject and more on Teitel in detail (almost the entire Torah….) In the next post.

Link to the original post in the United States Real Estate Forum on Facebook - Works on a desktop computer (To view the post must be members approved for the forum)

The original responses to the post can be read at the bottom of the current post page on the site or in the link to a post on Facebook and of course you are invited to join the discussion

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Responses

  1. No. Teitel has no responsibility to check the authenticity of the seller. The seller is solely responsible and can be sued for this. Teitel takes responsibility for debts discovered in the framework of the Teitel tests carried out for closing.

  2. Question about one of the points you recorded, seller's affidavit. In the event that the seller declares among the other clauses that the property does not have building violations, or fines imposed by the municipality, and after the sale, it turns out that there is actually a story for the claim or that the teitel is taking responsibility?

  3. Thanks for the important information. How about title insurance? When you buy a property for less than the market value and then invest a significant amount in renovation, is it worth increasing the insurance? Is there any reason to consider it?

  4. Thank you for important things you emphasize and say.
    Regarding the subject of "seller's statement", it should be noted that the date of construction of the property is also important here. That is, in Florida until 1978 they built the properties from materials such as asbestos. After 1978 they changed the standards and banned the use of asbestos.
    Therefore, the construction year is of great importance (automatically gives a relevant understanding for the property).