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What should I look for when signing a house contract?

Buying a house is one of the most significant financial commitments you will make. Signing the house contract is a crucial step in this process, and understanding its contents can save you from future headaches. This guide will walk you through the critical elements to look for when signing a house contract.

Understanding the contract

The house contract, also known as the purchase agreement or sale contract, is a legally binding document that outlines the terms and conditions of the property sale. It’s essential to read this document thoroughly and understand every detail before signing. 

The contract will typically include information about the property, the purchase price, deposit requirements, conditions of the sale, and the responsibilities of both the buyer and seller.

Key clauses to review

Here are the key clauses to review:

Purchase price and deposit

The purchase price is the amount you agree to pay for the property. Ensure this figure matches what you have negotiated. The deposit, usually a percentage of the purchase price, is paid upfront to show your commitment to buying the property. Make sure the deposit amount and payment schedule are clearly outlined in the contract.

Completion date

The completion date is when the property ownership officially transfers from the seller to you. This date is critical because it affects your financing and moving plans. Verify that the completion date allows enough time for your mortgage approval and any other necessary preparations.

Fixtures and fittings

Fixtures and fittings refer to items included with the property sale, such as light fixtures, built-in appliances, and window coverings. The contract should list all items included in the sale to avoid misunderstandings. If you expect certain items to remain with the property, ensure they are explicitly stated in the contract.

Contingencies and conditions

Contingencies are conditions that must be met for the sale to proceed. These protect you by allowing you to back out of the contract without penalty if certain conditions are not met. Common contingencies include financing, home inspection, and the sale of an existing property.

Financing contingency

A financing contingency ensures you can secure a mortgage before the sale is finalised. If you cannot obtain a mortgage, this contingency allows you to withdraw from the contract without losing your deposit. Make sure the contract specifies the time frame for obtaining financing and any conditions related to it.

Home inspection contingency

A home inspection contingency allows you to have the property inspected by a professional before completing the sale. If the inspection reveals significant issues, you can negotiate repairs or a price reduction with the seller. If an agreement cannot be reached, this contingency enables you to back out of the contract.

Sale of existing property contingency

This contingency protects you if you need to sell your current home before purchasing the new one. It stipulates that the purchase of the new property is contingent upon the successful sale of your existing home. Ensure this contingency is clearly stated in the contract if applicable.

Legal considerations

Although your solicitor handles this, it’s good to be kept in the loop and understanding these factors:

Title search and insurance

A title search verifies that the seller has the legal right to sell the property and that there are no outstanding claims or liens against it. Title insurance protects you from future disputes over property ownership. Ensure the contract includes a clear process for conducting a title search and obtaining title insurance.

Dispute resolution

The contract should outline how disputes between you and the seller will be resolved. This may include mediation or arbitration clauses. Understanding the dispute resolution process can help you avoid costly legal battles if issues arise.

Final review before signing

Before signing the contract, take the time to review all details carefully. Double-check all figures, dates, and conditions to ensure they match what was agreed upon.

Double-checking details

Verify that all personal and property details are correct, including names, addresses, and descriptions. Ensure that all agreed-upon terms, such as the purchase price, deposit, completion date, and included fixtures, are accurately reflected in the contract.

Seeking professional advice

It’s always wise to seek advice from a solicitor or conveyancer before signing a house contract. They can help you understand the legal jargon, identify potential issues, and ensure your interests are protected. A professional review can provide peace of mind and prevent costly mistakes.

Preparing for completion

Once the contract is signed, start preparing for the completion process. This includes arranging for the final mortgage approval, scheduling a final walk-through of the property, and coordinating the move.

Sett Mortgages is here to help you navigate the complexities of mortgage financing. We offer a range of mortgage products tailored to your needs, ensuring a smooth and stress-free experience. Our experts are ready to assist you with any questions or concerns, providing personalised advice to help you make informed decisions. Contact us today to learn more.

Signing a house contract is a significant step in your home-buying journey. By understanding the contract, reviewing key clauses, considering legal aspects, and seeking professional advice, you can confidently move forward.

Remember, the team at Sett Mortgages is here to support you every step of the way, from securing the right mortgage to preparing for completion. With careful planning and the right guidance, you’ll soon be enjoying your new home.

Your home or property may be repossessed if you do not keep up repayments on your mortgage.

Your home or property may be repossessed if you do not keep up repayments on your mortgage.