Contract Preparation
The Contract of Sale otherwise known as the Purchase and Sale Agreement is a legal document which binds the buyer to a set purchase price and binds the seller to convey the title. The contract also services as the initial directions to the escrow company to begin processing the transaction. When your agent prepares your Purchase and Sale Agreement, make sure you are perfectly clear about the following details:

Who is paying the various expenses of the sale, including closing costs?
Sellers customarily pay for the real estate commission, one-half of the escrow fee and their portion of the past year's taxes and assessments. Buyers customarily pay for one half of the escrow fees and their loan fees. Sellers and buyers share some of the expenses of buying and selling, such as title expenses. This needs to be negotiated during the purchase offer time and often depends on local real estate market conditions, other terms of the purchase contract, and the seller's proceeds and timing considerations.

Seller concessions, as they are known in real estate jargon, pay for at least part of the buyer's closing costs, are more common in a buyer's market than in a seller's market. These concessions typically occur during the offer- counteroffer-acceptance cycle. On rare occasion a seller will make further concessions during the closing time period. Any concession after the purchase contract is mutually agreed upon must be in writing and agreed to by all parties.

Some lenders will allow a credit from the seller to the buyer for the buyer's nonrecurring closing costs. But they usually won't allow a credit that reduces the amount of the buyer's down payment, or that includes any of the buyer's recurring closing costs, which include such expenses as fire insurance premiums, interest on the buyer's new loan and other prepaids. Lenders' policies vary on how large a credit for nonrecurring costs they'll allow.

What is the actual closing date?
The closing date is the date in which the net proceeds are available to the seller and the title has been recorded. It is set in the original purchase agreement by agreement between the buyer and seller. It is always nice to set a closing date that leaves you enough time to prepare to move in, and which doesn't cost you unnecessary money. The date of closing can affect your closing costs (make sure to ask your lender for a good faith estimate).

What is the date of occupancy?
Many times the seller will request to remain in the property after closing, in part to assure that closing actually occurs without the seller having moved from the property. If that is the case, the seller actually becomes the tenant of the buyer after closing, so proper written documentation is needed redarding the seller's occupancy.

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