Master's Tips for Buying Rural Property (6 of 8 in a series)

Contract and Deposit BUYER’S TIPS 6

You may decide this property is the one you want! If so, agree on a deposit amount and
obtain the owner’s signature to reserve the property for you a short period of time, until
you may come to terms for a contract. This will give you some days to get family consensus, do some courthouse record research, line up financing, and ensure another
meeting with the owner to sort out contingencies. Agree that the deposit will be refundable up to a certain amount of days, then nonrefundable thereafter.

You have now secured some additional time, and the owner knows you are serious and it is time to move toward a signed document:

Set an appointment with the owner to agree on terms for contract, perhaps with real estate attorney or other representative present (or you may consult with someone prior to your meeting). Be prepared to list unknowns as contingencies to the contract (clear title, subject to financing approvals, good survey, contingent on sale of your current property, appraisal reflecting value, etc.).

Review draft of contract before signing, and verify description of real property and any
other items included in the sale. Make sure proper credits are given for deposits, other
concessions, and note the balance you will be expected to pay at closing. Remember that closing costs associated with your purchase will increase the amount you need to bring to settlement. Know which of those costs will be paid by you, the buyer, and which ones will be paid by the current owner. Taxes are generally prorated to the day of closing.

Make note of deadlines: such as providing commitments to the owner for third-party
financing, the time when you may no longer terminate contract without default, when your deposit becomes nonrefundable, etc. Also, settle on a closing date which gives you ample time to make your arrangements. Be sure to perform in advance of these deadlines.

Exchange contact information for attorneys, representatives for buyer and seller, so that
good communication may simplify your buying process. Solicit help from these professionals, ask questions as you need to, and recognize that they must be paid for their services.

 

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