Common Real Estate Clauses You Should Know

Real estate clauses will vary slightly for each sale, but there are certain ones that will pop up again and again. While many are obvious standards to protect buyers from purchasing a proverbial money pit, the specifics of each clause are not always universally understood by all buyers. See how the common stipulations work, so the negotiation process can go smoothly from start to finish.

Offer to Purchase

The Offer to Purchase is where buyers make their demands known to sellers. It's not a standard document in that each offer is structured to fit the particular home sale. If the buyer is purchasing a home during the height of a seller's market, they may offer to pay for the property in cash without any conditions. However, most buyers will put at least a few conditions on their sale before submitting the offer.

Inspections

Inspections are not always a given for home sales, but they're one of the more common real estate clauses. Even if a seller has gotten an inspection on the home in the recent past, most buyers prefer to hire their own inspector so they can be assured they're getting the honest truth. Inspections make it possible to identify structural weaknesses, electrical hazards, and other types of damage that may have been originally hidden from plain view.

Finances

When home sales fall through during a messy escrow, it's normally because the pre-approval from the bank didn't result in a real-time approval at the time of sale. Like inspections, this is one of the most common clauses in an offer because it ensures the buyer only loses time and not money when they get the official word from the bank. Sellers can make a buyer's life a legal nightmare if the buyer fails to account for this scenario.

Titles

For some home sellers, titles are anything but straightforward. They may understandably try their best to hide any potential property disputes that are lurking in the shadows. If the bank has a lien on the home or the neighbor believes a full acre of the property is theirs, buyers need to know this before taking possession of the property. That's why home buyers make their sale contingent upon a third party researching the potential issues before getting the keys.

Schedules

Timelines for escrow will be different, depending on the clauses the buyer is asking for. But buyers can account for circumstances beyond their control by requesting schedule clauses. So if the only inspector in the area goes out of town for several weeks, a buyer doesn't have to be penalized for their departure. From banks to title companies, delays can come from practically any angle.

Additional Requests

Buyers are allowed to ask whatever they like from the seller—it's up to the seller to either accept or reject. So an offer may request that the seller leave their satellite dish or that they tear down the old shed in the back. Buyers in St. Albert can ask that the seller update the lighting fixtures or fix the cracked tile in the bathroom. In a buyer's market, buyers can even request that the home sale be contingent upon the sale of their old house. While a less common contingency, it can be a handy perk.

Regardless of how you structure an offer, it's necessary to think through the potential ramifications of including or excluding common real estate clauses. Not all of the above suggestions are advisable for every home buyer, but understanding them will mean fewer surprises down the road.