Essential Clauses for Real Estate Contracts - by Bill Bronchick

So you've just purchased a new home study course. You followed the instructions. You found a good deal. You present your contract to the listing broker, and you get laughed at!

The reality is, real estate brokers don't like "seminar" forms. They are comfortable using the "standard" agreement, although the standard agreement is usually drafted to protect the real estate broker, not you.

You must learn how to take any "standard" agreement and modify it to your liking. The following are some essential clauses I use when buying a property:

"And/or assigns" or "and/or nominees" As the buyer, you want to have the right to assign your contract. By placing your name with the words, "and/or assigns," you automatically give yourself that right. The words, "and/or nominees" is not as broad, but it has been interpreted as giving the buyer the right to place title in the name of a trust

Inspection clause Have the right to make the contract contingent upon your right to do a thorough inspection before a certain date. Make certain that you are not required to hire a professional inspector and that the inspection clause permits you to cancel the contract if there are things wrong with the property that the seller is not willing to fix or reduce the price.

Choice of escrow company As the buyer, insist on the right to choose the title or escrow company, so that you remain in control. A conservative or uncooperative escrow or title company can make life difficult if you are trying to do a creative deal.

Right to extend Most contracts call for a date certain for closing, using the words, "on or before". If the buyer is not ready to close by said date, the seller can hold him in default. If you want to buy more time, make the closing date "on or about." What does "on or about" mean? I'm not sure, but it certainly means later than "on or before"!