LIBRARY OF CLAUSES

 

 

Standard real estate contracts contain the basis for a binding agreement between buyer and seller.  Special circumstances sometimes require additional language.

 

Review the clauses in our Library of Clauses.  If you feel any of them will help to enhance or clarify your contractual position, consult the real estate attorney on your team and evaluate what changes to make consistent with your state law.

 

ACCEPTANCE OF BACK-UP OFFER.  Buyer agrees that this offer is accepted as a back-up offer only and is contingent upon the cancellation of the existing Sales Contract Reference Dated ______________________ between Seller and ___________________, by no later than ______ days following the acceptance of this offer as a back-up offer.  If the existing Sales Contract is cancelled within said time period, this offer shall become the primary offer.  If the existing Sales Contract is not cancelled within said time period, this offer shall become null and void.  Buyer reserves the right to declare this offer null and void at any time prior to cancellation of the first offer.

 

APPRAISAL CONTINGENCY.  The Buyer may order and pay for an appraisal on the property.  If the appraised value is less than the total purchase price stated in the contract of sale, the Buyer may, within three (3) calendar days of Buyer's receipt of the appraisal, at Buyer's sole option, declare this offer null and void.  Buyer is entitled to a return of all deposits, if any, less the appraisal fee and any other escrow expenses or fees chargeable to the Buyer.  Thereafter, neither the Buyer, the Seller nor any brokers shall have any further rights, obligations, or liabilities under this contract.

 

APPRAISAL LOWER THAN SALES PRICE.  All parties agree that it is possible that the property may not appraise for the full amount of the sales price.  If the property does not appraise for the sales price, then the Buyer and Seller agree that the Buyer will increase the amount of down payment in order to close this transaction, provided that the additional amount of the down payment required under this paragraph shall not exceed $_____________.

 

APPROVAL OF BUYER'S ACCOUNTANT.  This offer is contingent upon the approval by Buyer's accountant of the terms of this offer within five (5) calendar days of acceptance; provided, however, that such approval will be deemed to be given unless written notice of disapproval is given within such time.  If, for any reason, the Buyer's accountant disapproves of any of the terms of this offer, the Buyer may, at Buyer's option, declare this offer null and void and all deposits, if any, shall immediately be returned to the Buyer, less the amount of any escrow expenses or fees chargeable to the Buyer.   Thereafter, neither the Buyer, the Seller nor any brokers shall have any further rights, obligations, or liabilities under this contract.

 

APPROVAL OF BUYER'S ATTORNEY. This offer is contingent upon the approval by Buyer's attorney of the terms of this offer within five (5) calendar days of acceptance; provided, however, that such approval will be deemed to be given unless written notice of disapproval is given within such time.  If, for any reason, the Buyer's attorney disapproves of any of the terms of this offer, the Buyer may, at Buyer's option, declare this offer null and void and all deposits, if any, shall immediately be returned to the Buyer, less the amount of any settlement expenses or fees chargeable to the Buyer.   Thereafter, neither the Buyer, the Seller nor any brokers shall have any further rights, obligations, or liabilities under this contract.

 

ASSIGNMENT OF SALES CONTRACT.  Buyer may not assign or transfer this Sales Contract and/or Buyer's rights under this contract without the prior express written approval of the Seller.  Seller agrees not to arbitrarily or unreasonably withhold consent.  Buyer shall remain responsible for the performance of Buyer's obligations under the Sales Contract including payment of purchase price and timely closing.

 

BUILDING PERMITS.  Seller agrees to provide permits for additions and/or renovations to the property which were not properly obtained or shown in the public records.  Seller's cost to obtain permit(s), including costs to correct deficiencies required to obtain permits, shall not exceed $_________.  If costs exceed this amount, Buyer and Seller shall, within five (5) calendar days from the determination of said costs, mutually agree in writing on the amount of the excess that each of the parties shall pay.  If the parties fail to reach an agreement, this Sales Contract shall terminate, and all deposits shall be returned to Buyer less all settlement costs chargeable to Buyer.

 

BUILDING AND CONSTRUCTION WARRANTIES.  Seller warrants that Seller used a licensed contractor and that this dwelling has been constructed in keeping with standards generally accepted in the community, that it is habitable, and that all elements, both interior and exterior, will be in a finished condition upon delivery.  Seller shall convey to Buyer all existing contractor's guarantees:  (a) against defective materials and workmanship and (b) that dwelling has been built in accordance with the plans and specifications.  Should contractor's guarantees not exist or be insufficient to assure correction of defects within one year of recordation of this contract, Seller agrees to provide such warranty in accordance with this paragraph.  Seller also warrants that (a) the design of the building is sufficient to avoid water penetration; (b) there are no mechanics liens on this property; and (c) that if time for filing liens has not expired and any mechanics liens due to Seller's responsibility are subsequently filed, Seller shall be financially responsible for clearing liens.

 

BUILDING PERMITS - BUYER.  Buyer's obligations hereunder are contingent upon the Buyer obtaining a building permit to   (write in what permit is for)   within ____ (___) calendar days from acceptance of this offer.  If Buyer is unable to obtain said permit within the time specified, Buyer shall have the right to terminate this contract by giving written notice to Seller; in such event, all deposits shall be returned to Buyer, less any escrow expenses chargeable to Buyer.

 

BUILDING PERMITS IN PLACE.  Seller certifies that all the necessary building permits for the property improvements are in place, and that any required City and County inspections have been satisfactorily completed.  If the necessary permits and approvals are not in place, Seller agrees at its expense to obtain said items.  The Seller's cost to correct any and all non conformities shall not exceed $_______.  If the value of repairs exceed this amount, Buyer and Seller shall mutually agree on how the additional cost shall be absorbed.  If no agreement can be reached, this contract is null and void and all deposits shall be returned to Buyer, less escrow expenses chargeable to Buyer.

 

BUILDING PERMITS, LACK OF.  Buyer is aware that the _____________ _____________________________ was built without a building permit, does not conform to the tax office records, and may not meet current building codes.  Therefore, if the structure is destroyed in the future, Buyer may not be able to rebuild it under the present zoning code.  In addition, Buyer is aware that to obtain a permit, the County Building Department may require additional work to be done and/or demolition of the existing improvements.  The Seller shall not be required to make any repairs or pay for any expenses with respect to any nonconformance.  The Buyer hereby accepts the property in this "as is" condition and releases and agrees to hold harmless, the Seller and the Seller's and Buyer's agents from any and all claims arising from or connected with said nonconformance and lack of building permits.

 

COMMON WALL & ENCROACHMENTS

 

          ACCEPTANCE OF ENCROACHMENT.  Buyer accepts the encroachment in its present "as is" and "where is" condition.  Seller will not be required to correct or remove the encroachment.  Buyer further releases Seller and ABC BROKER from any and all liability and claims related to the encroachment.

 

          CORRECTION OF ENCROACHMENT.  Seller, at Seller's sole expense, agrees to correct the encroachment prior to closing.  The correction must be by way of removal of the encroachment or obtaining and recording an agreement which permits the encroachment to remain and grants the right to go upon the property being encroached upon to maintain the encroachment.  Buyer's obligations under this contract are contingent upon Buyer's approval of such correction.

 

          IF AGREEMENT IS AVAILABLE.  The property is subject to a Common Wall Agreement with the adjacent property owner, and a copy of that agreement is attached.  Buyer is advised to consult with legal counsel and/or other experts with respect to consequences of this agreement, and shall have seven (7) calendar days from the effective date of this contract to terminate this contract by giving written notice to Seller or escrow if Buyer is not willing to accept the property with this agreement.  If the Agreement is not recorded, Buyer and Seller agree to cooperate between themselves and the other parties to the Common Wall Agreement and to have it recorded at closing.

 

          IF AGREEMENT IS NOT AVAILABLE; FAVORS BUYER.  The property being conveyed has a common wall, portions of which are located on the subject property and an adjacent property.  This offer is contingent upon the Seller, at Seller's cost and expense, within ____ (___) calendar days from the date of acceptance of this offer, 1) having the property staked and surveyed by a licensed surveyor, 2) providing Buyer with a location map by the surveyor showing the easement and properties involved, and 3) obtaining a Common Wall Agreement with the property owner who shares the common wall.  Buyer is advised to consult with legal counsel and/or other experts with respect to consequences of this condition, and shall have seven (7) calendar days from the date of acceptance of this offer to terminate this contract by giving written disapproval to Seller or escrow if Buyer is not willing to accept this condition or the Seller cannot obtain a Common Wall Agreement.  Buyer and Seller agree that the Agreement will be recorded.

 

          IF AGREEMENT IS NOT AVAILABLE; FAVORS SELLER.  The Buyer is aware that there is a "common wall" between this property and the adjoining property and that portions of this wall may be located on both properties.  There is no written agreement between the affected properties regarding this condition.  The wall was constructed at this location approximately ____ (___) years ago.  Seller agrees to have the property staked by a licensed surveyor and to provide a location map showing the location of the wall and the properties involved by   (date)  .  Buyer is advised to consult with legal counsel and/or other experts with respect to consequences of this condition, and shall have seven (7) calendar days from completion of the survey and receipt of the location map to declare this contract null and void because of this condition by giving written disapproval to Seller or escrow.  If no written disapproval is received within the time specified, Buyer accepts the "common wall" in its "as is" condition and at its present location and agrees to assume the responsibility for it.

 

CANCELLATION (BUYER).  In the event cancellation occurs because Buyer is not able to perform, Buyer shall pay for all costs of cancellation, including costs of attorneys' fees, and other costs to cancel escrow and terminate this agreement.  In addition, Buyer may be held to be in default under C-28 of the contract

 

CANCELLATION (SELLER).  In the event cancellation occurs because Seller is not able to perform, Seller shall pay for all costs of cancellation, including costs of attorneys' fees, and other costs to cancel escrow and terminate agreement.  In addition, Seller may be held to be in default under C-29 of the contract.

 

CONTINGENT ON ABILITY OF BUYER TO SELL PRESENT HOME.  This offer is contingent on the ability of Buyer to sell Buyer's present property, located at ___________________________________________ ___________________________________ ("Buyer's Home"), which Buyer shall diligently seek to sell expeditiously and in good faith, time being of the essence.  Settlement on this contract will take place on or about the same time that settlement is conducted on the sale of the property of Buyer.  It is agreed that if Seller receives a backup contract to this offer, Seller shall so notify the Buyer.  Buyer will have ____ (___) hours following receipt of written notification from Seller or Seller's agent of the backup contract in which to remove this condition as well as any other contingency still unfulfilled which are contained in the offer made by Buyer or any contingencies or addenda attached and/or made a part thereto.  If Buyer fails to remove the contingencies, then this contract shall be null and void and the deposit of Buyer shall be refunded in full; provided, however, that should the sale and closing of the Buyer' Home not be accomplished by _____ M. (Time) on  ____________________(Date), Seller may declare this contract null and void by written or oral notification in which event the deposit of Buyer shall be refunded in full.

 

CONTINGENT ON SELLER FINDING REPLACEMENT HOME.  Seller's obligations to sell the property are contingent upon Seller purchasing and closing upon a replacement house, and this contract, may be cancelled by Seller unless Seller or Seller's agent gives written notification to Buyer or Buyer's agent that Seller has purchased under contract a new house.  If Seller has not removed this Addendum by ______ M.(Time) on _____________________ (Date), then this contract shall be null and void, and the deposit of Buyer shall be returned in full.

 

COUNTEROFFERS.  Buyer understands that Seller is providing counteroffers, unsigned by Seller, to two potential buyers simultaneously.  Thus, Seller may receive offers signed by separate buyers for Seller's acceptance.  Buyer agrees that Seller is free to accept either, or none, of the offers, and that Seller shall not be bound to Buyer unless Seller returns to Buyer the Counteroffer made by the Buyer and accepted by Seller.  If Buyer wishes to submit a Counteroffer to Seller, Buyer must do so by __________________.

 

COUNTEROFFER, MULTIPLE.  Seller is making a Counteroffer(s) to another prospective buyer(s) on terms which may or may not be the same as in this Counteroffer.  Acceptance of this Counteroffer by Buyer shall not be binding unless and until it is subsequently re-signed by Seller in paragraph 7 below and returned to Buyer or Buyer's agent.  Prior to the completion of all of these events, Buyer and Seller shall have no duties or obligations for the purchase or sale of the Property.

 

COUNTERPART DOCUMENTS.  This document may be executed in counterparts, each of which when executed shall, irrespective of when it is signed and delivered, be deemed an original, and said counterparts together shall constitute one and the same instrument.  Any deadlines specified in the contract remain applicable.

 

DEPOSITS AND DOWN PAYMENT

 

          BUYER DEPOSITS NOT TIMELY.  If Buyer's initial deposit and/or any additional deposits required under the contract are not received by escrow by the time period specified in the contract, Buyer will be considered in default, and Seller may exercise the Seller's remedies in the contract.  Time is of the essence in the payment of these deposits.

 

          CASH FUNDS.  Buyer shall provide satisfactory evidence of the availability of purchase funds within five (5) days of acceptance.  If the Buyer is unable to provide satisfactory evidence within that time frame, Seller may declare this contract null and void with all deposits to be returned to Buyer.  Buyer's lender is authorized to verify with Seller's agent that Buyer has sufficient funds available to close this transaction.

 

          DOWN PAYMENT.  Seller understands and Buyer represents that availability of Buyer's funds to cover the down payment is not conditioned and said funds are not obtained from any source which could cause a delay in the closing date specified in the contract.

 

          PURCHASE FUNDS.  Seller has the option to declare this contract null and void, if any earnest money deposits are not made on time as required by the contract or if Buyer's earnest money check does not clear.

 

Buyer to provide satisfactory evidence of the availability of cash funds within five (5) calendar days of acceptance.  If Buyer is unable to provide satisfactory evidence within that time frame, Seller has the option to declare this contract null and void.

 

          RELEASE OF BUYER'S DEPOSITS TO SELLER PRIOR TO CLOSE OF ESCROW.  Buyer hereby instructs escrow irrevocably and without condition, to disburse prior to closing the sum of $__________ to the order of (Name of recipient) on (date).

 

In consideration of escrow releasing this sum as herein provided, the Buyer and Seller hereby indemnify and hold harmless escrow from and against any and all losses, costs, expenses, fees and claims which may arise or be incurred as a result of escrow's compliance with these irrevocable instructions for the early release of funds.

 

FINANCING

 

          ASSUMPTION INCLUDE IN SPECIAL TERMS.  Buyer may cancel this contract and recover all deposits previously made if (a) the principal balance of the mortgage to be assumed is less than $__________, or (b) upon assuming the mortgage, the interest rate will be higher than ____% per annum or the monthly payments therein required exceeds $__________, or (c) the assumption fee required to be paid is more than $__________, or (d) the Seller's consent to the assumption is required and Seller refuses to consent.

 

          BUYER TO PAY DISCOUNT POINTS (WITH LIMIT).  FHA discount points shall be paid by the Buyer, provided, however, if the points required to be paid exceed $________ (or ____%), Buyer shall have the right to cancel this contract, by giving written notice to Seller, unless Seller agrees in writing to pay the excess amount (points).  In the event of cancellation, the deposits previously made by the Buyer are to be refunded, less escrow expenses chargeable to Buyer.

 

          CONTINGENCY TO REVIEW AND APPROVE MORTGAGE TO BE ASSUMED.  Within ____ (___) calendar days from acceptance of this contract, Seller agrees to deliver to Buyer a copy of the First Mortgage, including any amendments.  Any and all costs in obtaining the said document shall be paid by Seller.  This offer is contingent upon the Buyer's review and approval of the Mortgage and amendment, if any, within ____ (___) calendar days of receipt from Seller; provided, however, that such approval will be deemed to be given unless written notice of disapproval is given within such time.  If written disapproval is given within such time, this contract shall be null and void and all deposits shall be returned to Buyer.  In the event that Seller fails to provide the Mortgage and amendment(s), if any, within the time specified, Buyer may, at Buyer's sole option, declare this contract null and void by delivering written notice to Seller or escrow, and all deposits shall be returned to Buyer.

 

          FHA/VA LOAN.  The origination fee (1%) is to be paid by the ___________________.  FHA/VA discount points shall NOT exceed ____ percent (___%) of loan.  The discount point(s) to be paid as follows with no more than:  ____ (___) point(s) by Buyer, ____ (___) point(s) by Seller.  _______________ (Buyer/Seller) share of points shall be paid first and balance, if any, paid by _____________ (Buyer/Seller).  VA funding fee of ____ percent (___%) to be paid by ______________.  If the discount point required to be paid exceed the limit set above, and if the obligated party is not willing to pay their share, the obligated party(ies) may terminate this contract.

 

Buyer shall request for the appraisal immediately upon the loan application.  In the event the FHA/VA appraised value is less than the purchase price, the Buyer shall notify the Seller, in writing, of Buyer's decision to either cancel this contract or proceed with the consummation of the transaction, within ____ (___) hours of notification of the FHA/VA appraised value, by lender.

 

          IF BUYER IS LOOKING FOR A SPECIFIC TYPE OF ARM.  If the Buyer is unable to obtain an ARM with a rate adjustment cap per period of ____% and a maximum rate cap of ____% over the initial rate, Buyer shall have the right to cancel this contract and recover all deposits previously made by giving written notice thereof to Seller on or before _____________________________.

 

          SELLER TO PAY DISCOUNT POINTS (WITH LIMIT).  FHA discount points shall be paid by the Seller, provided, however, if the points required to be paid exceed $_________ (or ____%), Seller shall have the right to cancel this contract, by giving written notice to Buyer, unless Buyer agrees in writing to pay the excess.  In the event of cancellation, the deposits previously made by Buyer are to be refunded, less escrow expenses chargeable to Buyer.

 

FEDERAL EMERGENCY MANAGEMENT AGENCY.  Buyer is hereby advised to consult the FEMA studies with a civil engineer as they relate to flood zones which may affect subject property and either limit development of said property or result in a dangerous situation.  Broker is not trained in water run-off and makes no representations, guarantees or warranties regarding surface water and how it may affect the Property.

 

NON-CONFORMING STRUCTURE.  The property is zoned (type of zoning) and is a lawful non-conforming structure.  The buildings do not conform with the current zoning laws of the City though they are permitted because they were constructed when a different zoning was in effect.  As a non-conforming structure, there are restrictions on the owner's right to rebuild if the improvements are destroyed or demolished.  This may cause problems with respect to financing, re-construction, repair, use, property values and re-sale.  The Buyer understands the consequences of this non-conformity and agrees to accept this condition "AS IS."  Buyer has not relied upon any statement or representation by Seller or ABC Broker concerning such structure.

 

NON-CONFORMING USE.  Buyer acknowledges that the property is considered a legal non-conforming use in the zoning category of surrounding property.  Buyer is independently satisfied as to whether or not the intended use is grandfathered and understands all the legal possibilities, ramifications and requirements relative to the use of the property.

 

NOTICES.  Notices, requests, or demands by either Seller or Buyer shall be in writing and shall be delivered personally or mailed via registered or certified mail, postage prepaid, addressed to Seller or Buyer at their respective addresses herein set forth, with copies to the real estate agents and escrow officer.  If mailed pursuant to this paragraph, notice shall be deemed given when mailed.

 

NOTICES IN WRITING - LONG VERSION.  All notices required or permitted hereunder to be given to the parties to the contract or to escrow shall be given in writing by personal delivery by facsimile, or by depositing the same in the United States mail, registered or certified, return receipt requested, and postage prepaid.  In each event, they shall be addressed to the parties or their respective broker at the addresses and/or facsimile numbers, as the case may be, set forth in the contract or to such other address or facsimile number as either party shall provide to the other party hereto in the manner set forth in this paragraph for the giving of notice.  Any written notice sent by registered or certified mail shall be deemed to have been received by the addressee as of the date it is mailed in accordance with the foregoing provisions.

 

NOTICES IN WRITING - SHORT VERSION.  Notices, requests, or demands by either party shall be in writing or shall be given personally, sent by facsimile transmission, or by Registered or Certified Mail, return receipt requested, postage prepaid, addressed to Seller and Buyer at the mail or fax addresses set forth herein.  Notice shall be deemed given, when properly transmitted or deposited in the mails.

 

OCCUPANCY

 

          BUYER RESPONSIBLE FOR SELLER'S LOSS OF RENT.  If Seller gives the standard 45-day notice to vacate to a month-to-month tenant and Seller is able to deliver possession of the property to Buyer by the original scheduled closing date in the contract but Buyer is unable to close by that date for any reason through no fault of the Seller, then Buyer shall compensate Seller through escrow $___________ per day from the 46th day until the transaction is closed.

 

          EARLY OCCUPANCY.  Buyer and Seller understand and agree that Buyer is permitted to occupy the property prior to the close of escrow provided Buyer executes an "early occupancy agreement," a form of which is attached hereto and made a part of this contract.

 

          EARLY OCCUPANCY.  Seller agrees to deliver possession of the property at closing unless otherwise specified below.  If possession is delivered prior to closing, Buyer assumes all risk of loss to the property from date of possession, and shall be responsible for maintenance, at Buyer's expense, and shall be deemed to have accepted the property, real and personal, in an "as is" condition as of the time of taking possession, the right of inspection to be exercised prior to the time of taking possession.  Buyer should verify that there is adequate hazard insurance coverage during the Buyer's possession.

 

          LATE OCCUPANCY.  Seller shall have the right to remain in possession of the property for a period not to exceed ____ (___) days.  Seller shall inform Buyer of Seller's election to exercise this right no later than ten (10) days prior to closing.  Should Seller elect to exercise this right, Buyer and Seller herein agree to execute a rental agreement to cover a period of ____ (___) days commencing from date of recordation at a rate equal to the per diem amount of Buyer's new mortgage payment.

 

OFFERS AND COUNTEROFFERS

 

          BACKUP OFFER.  This is a backup offer and is in first position behind a primary contract now in escrow.  All time frames of this contract shall commence after written notification from Seller to Buyer that the primary contract now in escrow has been cancelled.  Buyer may, at Buyer's sole discretion, withdraw this backup offer prior to being notified by the Seller, in writing, that the primary contract has been cancelled.  For the purpose of this contract, acceptance will be defined as that date the Buyer has been notified that the primary contract has been cancelled.

 

          BUYER HAS OFFER ON ANOTHER PROPERTY.  Seller is aware that Buyer has made an offer on another property and the acceptance of this offer by Seller is subject to the cancellation by all parties of the prior offer within seventy-two (72) hours of Seller's acceptance.  If the offer is not cancelled, this offer will be deemed null and void, and all deposits will be returned to Buyer less all escrow costs chargeable to Buyer.  If the prior offer is cancelled, this offer will remain in full force and effect.

 

          BUYER IN BACKUP POSITION.  Buyer acknowledges that this offer is a backup offer and that Seller accepts this offer contingent upon the written cancellation of the existing contract between the Seller and (Buyer's name),  dated _______________________, no later than __________________.

 

          BUYER IN BACKUP POSITION -2.  Buyer understands that this offer is a backup offer and there is an accepted primary contract on this property with the following contingencies: ________________________________________________________________ _________________________________________________________________.  Buyer may cancel this contract at any time prior to receiving Seller's written notice that the primary contract has been cancelled and that this contract is in force.

 

          SELLER TO TAKE BACKUP OFFERS AND REMOVAL CLAUSE.  Seller may continue efforts to sell the subject property.  If a third party submits an offer to purchase the property at a price and upon terms acceptable to Seller, Seller shall give written notice thereto to Buyer, and Buyer shall have ____ hours after receipt of the notice to amend this contract .  If Buyer fails to execute and deliver such amendment in the time specified, Seller may accept the third party's offer, in which event, this contract shall be null and void, and Seller and Buyer shall be released from their obligations hereunder.  All parties understand that time frames tagged to the "Date of Acceptance/Acknowledgement of this Offer" are amended to the date the Buyer notifies the Seller in writing that Buyer has accepted an offer on the Buyer's property.

 

          SELLER WANTS TO TAKE BACKUP OFFERS.  Seller reserves the right to continue marketing the property and to take secondary backup offers which would become a primary offer only in the event of Buyer's default or nonperformance of this contract.  Buyer understands that the standard term of the contract covering Buyer defaults remains applicable even if the "backup" offer becomes the primary offer.

 

          SIMULTANEOUS COUNTEROFFERS BY SELLER. 

 

A.  Buyer understands that Seller has made a counteroffer from Seller to another buyer to sell the subject property.  Until such time Seller notifies Buyer that the pending counteroffer has expired, or has been revoked by Seller, this counteroffer, if accepted by Buyer, constitutes a back up contract only.

 

B.  Buyer is aware Seller is simultaneously making two counteroffers.  In the event both counteroffers are accepted, then Seller reserves the right to choose one offer as the primary contract and to choose the second offer as a back-up position.  Seller shall notify Buyers of their positions within two (2) days of receipt of the counteroffer's acceptance.

 

          SIMULTANEOUS OFFERS BY BUYER.  Seller understands that Buyer has made an outstanding offer on another property which is pending.  If Seller decides to accept this contract, Seller agrees that within twenty-four (24) hours from the time Buyer receives a copy of the accepted offer, Buyer may either revoke any other pending offers which Buyer currently has made or may cancel this contract.  If Buyer decides to cancel this contract, Buyer shall give Seller written notice by hand delivery or fax of Buyer's decision to cancel within twenty-four (24) hours, and Buyer shall be entitled to a refund of all deposits made in conjunction with this contract.  Therefore, this contract will be void and neither Seller nor Buyer shall have any further responsibilities or obligations to each other under this contract.

 

OLDER HOME.  Buyer understands that the subject property is not a new home but is approximately ____ (___) years old.  Therefore, although Seller is not aware of any problem, it may not conform to current building codes.  Buyer is strongly urged to (1) have a professional contractor or architect verify compliance with the building code and permit requirements, and (2) have a professional home inspection to ascertain the exact condition of the property.

 

PENDING CHANGES.  Seller certifies that Seller knows of no easements, imminent or pending assessments, liens or lawsuits, upon or affecting said property and/or any association (if applicable) except as noted in the Seller's Disclosure Statement.

 

PENDING LEGAL ACTION.  Buyer is aware and understands that the property is subject to the following current legal action:  _________________________________.  Buyer is granted permission to contact the attorney and the Association regarding the legal action.

 

PERSONAL PROPERTY

 

          BILL OF SALE.  Buyer and Seller understand and agree that the personal property described in the attached inventory is not included in the sales price and will be transferred to Buyer by way of a Bill of Sale to be paid through escrow at closing for a total purchase price of $_________.

 

          BLUEPRINTS.  Seller agrees to deliver to Buyer prior to closing all blueprints, architect's drawings, landscape architect designs, and all building and landscaping specifications, surveys and maps describing the property, presently in the Seller's possession.

 

          FAVORS BUYER.  Seller shall provide Buyer with a complete inventory of all items to be included in the sale of this property within five (5) calendar days of acceptance of this offer.  Buyer shall approve same in writing within three (3) calendar days of receipt or this offer shall be null and void with all deposits returned to Buyer less any escrow expenses chargeable to Buyer.

 

          FAVORS SELLER.  The purchase price includes those items on the inventory list attached hereto.  These items are being conveyed in "AS IS" condition.  This offer is contingent upon the Buyer's examination and approval of the inventory within five (5) calendar days from acceptance of this offer.  If Buyer does not approve of inventory, Buyer may declare this contract null and void by giving written notice to Seller within the time specified.  No response from the Buyer within the time specified shall be deemed approval.

 

          INVENTORY.  Seller to provide Buyer with a complete furniture inventory within five (5) calendar days of acceptance of this offer.  Buyer's obligation to buy is conditioned upon Buyer's written approval of same within three (3) calendar days of receipt.

 

          PERSONAL PROPERTY.  The personal property and fixtures listed in this contract are included in the purchase price and shall be the same property shown to Buyer or located in the property immediately prior to the signing of this contract.  Seller or Seller's agents shall make no substitutions unless agreed to by Buyer in a written agreement signed by both Buyer and Seller.

 

PRIVATE ROAD.  Buyer is hereby advised that subject property is located on a private road which may require that Buyer contribute to the maintenance of said road for continued access.  Buyer should have his attorney review the roadway agreement (if one exists) and advise Buyer accordingly.  Some lending sources may refuse to provide financing if no maintenance agreement exists or is insufficient in form.

 

PROFESSIONAL'S DISCLAIMER.  Buyer is aware that  (name of Seller)  is a licensed  (contractor, architect, etc.) .  Buyer acknowledges that Seller has made no representations as a  (contractor, architect, etc.)  to Buyer.  Buyer is advised to, and has a right to, use professionals of Buyer's choice to inspect the property under the contract. 

 

PROPERTY CONDITION

 

          AS IS.  The Buyer is given every opportunity to inspect the property and is aware of the following conditions: ______________ _________________________________________________________________ _________________________________________________________________ _________________________________________________________________

as well as all of the conditions disclosed in the attached Seller's Real Property Disclosure Statement dated __________________, which disclosures are incorporated herein by reference.  With full knowledge of these conditions, the Buyer is aware, understands and agrees that all land, improvements and real and personal property will be sold, conveyed and/or assigned, as applicable, by the Seller to the Buyer in an "AS IS" condition without warranty or representation, express or implied, the Buyer hereby agreeing, acknowledging and affirming to the Seller that the Buyer has had full opportunity to inspect, and accepts all land, improvements and real and personal property in an "AS IS" condition, including the conditions disclosed above.  Buyer understands and acknowledges that the Seller hereby expressly disclaims any and all warranties, whether express or implied, with respect to the land, improvements, and real and personal property, including without limitation, any warranty of habitability, warranty of merchantability, or warranty of fitness for a particular use.  It is the Buyer's intention to give up, waive, and relinquish all rights to assert any claim, demand, or lawsuit of any kind with respect to the condition of the land, the improvements, the real property, or the personal property.  The Seller will not be required to make any repairs or pay any expenses concerning the land, the improvements, the real property, or the personal property.

 

          IF REPAIRS ARE NOT EXPECTED TO BE COMPLETED BY CLOSING.  It is mutually agreed that in the event repairs cannot be completed by closing, escrow shall withhold from Seller's proceeds the estimated cost of repairs agreed to by Seller.  Repair bills shall be paid through escrow, and any balance remaining undisbursed shall be returned to Seller upon completion of repairs.  Seller's agent shall send list of repairs to be done and estimated costs to escrow prior to closing.

 

          SOILS CONDITION - EXAMPLE OF DISCLOSURE.  Buyer is aware that the soils condition of the property is unstable.  The retaining wall on the rear side of the property shows cracks which may be due to settlement.  The Buyer accepts the property in "AS IS" condition with respect to such soils condition and settlement and the possible consequences of this condition.  The Seller makes no warranty of any kind with respect thereto.

 

          SOILS INSPECTION CONTINGENCY.  Within seven (7) calendar days of acceptance of this contract, Buyer may, at Buyer's expense, have a soils inspection conducted by experts/representatives of Buyer's choice.  This offer is contingent upon Buyer's approval of the soils reports within five (5) calendar days from the date of inspection; provided, however, that such approval shall be deemed to be given unless written notice of disapproval is given within such time.  Seller shall give reasonable access to the property to Buyer and/or representatives.

 

PROPERTY DISCLOSURE

 

          ASBESTOS - SELLER.  Seller suspects, or knows about, the existence of asbestos on the property.  Seller makes no warranty or representation about the nature or condition of such asbestos.  Seller makes no representation as to whether this material must be removed, repaired or maintained in any way, pursuant to state and/or federal environmental laws.  Buyer is encouraged to retain experts to obtain appropriate advice.

 

          ASBESTOS - BUYER.  Seller represents that asbestos or hazardous substance exists on or under the property.  Seller agrees to defend and indemnify Buyer and hold Buyer harmless from and against any claim, demand, liability, damages, penalties, costs or expenses (including attorney's fees) arising from the existence of any hazardous substance or waste on the subject property, or from any action on account thereof taken by governmental authorities under either state or federal environmental laws.  This includes, but is not limited to, all costs incurred in removing and disposing the hazardous material in the manner permitted by law.

 

          ACCESS (LEGAL).  Seller warrants that there is legal access between the property and a public roadway.  If property does not border a public street, road or highway, Seller shall, on or before fifteen (15) days prior to closing, furnish to Buyer, at Seller's expense, one of the following:  (1) copy of a recorded access easement, running in favor of any and all title holders of the property; or (2) an easement in recordable form, from the (servient) owners of the property over which the easement is to run, and running in favor of Buyer, Buyer's heirs, assigns, and successors in title.  Seller shall pay for recording said easement and all other related expenses.

 

          ASSESSMENTS.  The Seller represents that as of _____________, there are no past due, current, or known future assessments affecting the subject property except as follows: _______________  _______________________________________________________________.  If, (1) as of the date of this agreement, there are any past due, current, or known future assessments affecting the subject property which have not been disclosed by Seller, or (2) any assessments are authorized or become known prior to the closing date of this contract, then Buyer reserves the right to declare this contract null and void and recover all deposits unless either (a) the assessments which are owed at or before closing are paid in full by Seller prior to closing, or (b) the assessments known to be due after closing will be paid in full by Seller from funds left in escrow for that purpose.  If Seller obtains any information prior to closing concerning assessments not disclosed herein, that information shall promptly be disclosed to Buyer in writing.

 

          CATCHMENT WATER.  The Buyer understands:  that water service to this property is by catchment system only; that lead contamination or other problems can occur with this type of water system; that the quantity of water from this system may be insufficient at times and the water may need to be obtained from other sources.  Buyer accepts the property with its existing catchment water system subject to these risks and agrees not to assert any claims against the Seller and the Seller's agents.

 

          CESSPOOL.  Buyer is aware that the property is not connected to the sewer and that a cesspool is currently used for sewage disposal.  An additional cesspool or septic tank system must be built to accommodate an additional structure if allowed, and appropriate permits and minimum lot size may be required before a second cesspool or septic tank system will be permitted.  Buyer has received, reviewed, and been advised to contact the State Department of Health regarding current cesspool policy.  Buyer is further aware that this policy may change at any time, and Buyer is accepting the property without any representation, statements or promises by Seller or ABC broker regarding cesspools.

 

          COMMUNITY ASSOCIATION DUES.  Buyer is aware that the property is located in an area or neighborhood which assesses fees for _________________.  These fees are currently $________ per ________ and may increase in the future.

 

          DISCLAIMER RE BUILDING ORDINANCES.  Buyer acknowledges that Buyer has investigated the local governmental zoning and building ordinances and requirements as to the erection of a building on the property, and that Buyer has investigated the availability of water, sewer, gas, and electrical services for the property, and the fees and costs related thereto.  Buyer further acknowledges that Buyer is relying solely upon data obtained by Buyer from outside sources on all these matters and is not relying upon any representations made by Seller or its agents.

 

          DISCLOSURE STATEMENT.  This offer is contingent upon the approval by Buyer of the Seller's Disclosure Statement within ____ (___) days of receipt from Seller.  If Buyer fails to provide written notice of approval within the prescribed time, this offer shall be considered terminated and the Termination Provision shall apply.

 

          HOMEOWNER'S INSURANCE.  Buyer is hereby advised that it may be necessary to purchase additional WIND/HURRICANE coverage in order to obtain a loan secured on the property from any federally regulated financial institution or guaranteed by an agency of the U.S. Government.  Buyer is advised to consult with an insurance company of Buyer's choice to determine the cost and availability of the additional WIND/HURRICANE coverage in Buyer's Homeowner's Insurance Policy.  Buyer is also aware that a Homeowners' Insurance Policy may not be available at this time and that this condition is beyond the Seller's control or responsibility.  Buyer understands and agrees that this offer is NOT contingent upon Buyer's ability to obtain such an insurance policy. 

 

RENTAL POOLS.  Buyer understands that this apartment in the project known as ______________________ is being sold in an isolated resale transaction, that neither Seller nor ABC Broker is the developer of said project, nor an affiliate thereof, nor the manager of the management entity nor an affiliate thereof.  Buyer further affirms that the entire consideration paid in this transaction pertains to and is applicable to the condominium apartment and appurtenant interests in the common elements of said project (i.e., real property) and that no separate consideration has been paid or will be paid for the interest, if any, in the rental management entity, transferred with said apartment.  Buyer also understands that the Seller and its agents are not offering directly or indirectly a rental service of any kind to the owners of condominium apartment units in the project, either individually or in any form of pooling arrangement, or by a third party designated or arranged for by Seller, nor have any representations been made by the Seller or its agents as to the feasibility of renting the apartment or otherwise generating income or deriving any other economic benefit from ownership of the apartment.

 

REMOVAL CLAUSE.  Seller reserves the right to continue marketing the Property and to accept back-up offers.  Buyer agrees that if the Seller accepts one or more back-up offers, the Buyer shall have 72 hours, after written notice to the Buyers, to waive and remove [all contingencies] [the following numbered contingencies: ____________] by way of a written waiver of contingency delivered to Escrow.  If the contingency is not waived and removed as required by this paragraph, then this offer shall be null and void.

 

RETURN OF ALL SELLER'S DOCUMENTS.  In the event the transaction does not close, the Buyer agrees to return to the Seller all documents and disclosures that Buyer has received within SEVEN (7) days of Buyer's signing of a cancellation notice.  Failure to do so before the Seller signs the cancellation notice will result in escrow being instructed to withhold $50.00 from the Buyer's deposit and deliver it to the Seller to cover Seller's costs to replace lost documents and disclosures. 

 

RIGHT OF FIRST REFUSAL.  If, during the term of the lease, or any extension thereof, Lessor shall receive an offer to purchase this property or if Lessor shall wish to enter into an agreement for the sale of this property, Lessor shall first give Lessee written notice setting forth the name of the proposed purchaser, the purchase price, and all the terms and conditions of the proposed sale. Within ___ (___) calendar days following the delivery or mailing of said notice pursuant to the terms of this lease, Tenant shall have the right to purchase the property upon the same terms and conditions.  Said right shall be exercised by delivering or mailing such election to Owner prior to the expiration of said calendar days.  If Tenant shall not elect to make such purchase within said time, and the sale is made in accordance with the terms set forth in the notice, Tenant shall not have a right to purchase upon any resale.

 

RISK OF LOSS.  If the improvements are damaged by fire or other casualty prior to closing, and the cost of restoration does not exceed five percent of the assessed valuation of the improvements damaged, the Seller shall restore the improvements at Seller's expense, and the time for closing shall be extended sixty (60) days.  If the cost of restoration exceeds five percent of the assessed valuation of the improvements damaged, the Buyer shall have the option of taking the property "as is," together with any insurance proceeds payable by virtue of such damage, or canceling this contract and receiving a refund of all deposits made hereunder.  Seller shall maintain standard hazard and extended perils coverage of casualty insurance with a reputable company until time of closing, but shall not be required to restore if cost of restoration will exceed five percent of the assessed valuation of the improvements damaged.

 

SELLER'S PRIOR CONTRACT.  Buyer is aware that Seller has an accepted "primary contract" on subject property and that this offer is a backup offer that will be placed in first position if the current "primary contract" is cancelled for any reason.  Seller agrees to inform Buyer in writing within ____ (___) days from when the current "primary contract" is consummated or cancelled, whichever is the case.  If the primary contract is cancelled, Seller shall provide evidence of formal cancellation.

 

Buyer has the unilateral right to cancel this contract at any time prior to receiving written notice from Seller that this offer has become the primary contract.  Buyer may cancel by giving timely written notice to Seller or escrow.

 

SPECIFIC REPAIRS TO BE DONE BY SELLER.  1) Leaking Roof to be Repaired:  The Buyer is aware that the family room roof leaks.  The Seller, at Seller's sole cost and expense, agrees to have the roof above the family room repaired by a licensed roofing contractor prior to closing.  However, Seller does not warrant that it will not leak in the future and makes no representations in this regard.  2) Ice-maker to be Repaired or Replaced:  Buyer is aware that the ice-maker does not work.  The Seller, at Seller's sole cost and expense, agrees to have the ice-maker professionally repaired or replaced with one of similar type prior to closing.

 

TAX EXCHANGE.  If the Property qualifies for exchange treatment, both Seller and Buyer reserve the right to restructure this transaction as an exchange (including, but not limited to, a tax deferred exchange under Section 1031 of the Internal Revenue Code of 1986 as amended), provided that such restructuring does not delay the closing of this transaction in any way and does not result in the imposition of any additional costs or liabilities upon the other party, and provided further that exchange treatment is not a contingency to this contract.

 

TAX AND EXCHANGE

 

           FIRPTA.  Seller agrees to comply with federal (FIRPTA) and state tax withholding laws.  Escrow is hereby notified, and Seller agrees and irrevocably instructs and authorizes escrow to withhold all necessary funds for compliance unless Seller provides escrow prior to closing with appropriate waivers or exemptions.

 

          WHEN BUYER WANTS A 1031 EXCHANGE.  Seller is informed that Buyer intends to include the property as a replacement property in a Section 1031 exchange of properties.  Seller agrees to cooperate in effecting said exchange by signing all necessary and appropriate exchange documents.  Buyer agrees to indemnify and hold Seller harmless from all costs, expenses and liabilities incurred by Seller because of Buyer's participation in said exchange.  Seller is not required to assume temporary ownership of any other property.  ABC Broker and its sales agents are not responsible for any value set by the principals to the exchange.  ABC Broker advises principals to seek competent legal and tax counseling regarding IRC Section 1031 Exchange.  Principals are not relying on any representations in this regard by ABC Broker or its sales agents.

 

          WHEN SELLER WANTS A 1031 EXCHANGE.  Buyer is informed that Seller intends to include the property as a relinguished property in a Section 1031 exchange.  Buyer agrees to cooperate in effecting said exchange by signing all necessary and appropriate exchange documents.  Seller agrees to indemnify and hold Buyer harmless from all costs, expenses, and liabilities incurred by Buyer because of Seller's participation in said exchange.  Buyer is not required to assume temporary ownership of other property.  ABC Broker and its sales agents are not responsible for any value set by the principals to the exchange.  ABC Broker advises principals to seek competent legal and tax counseling regarding IRC Section 1031 Exchange.   Principals are not relying on any representations by ABC Broker or its agents.

 

TERMITE.  Buyer understands that even though the referenced provisions require the Seller to disclose any prior and/or current infestation or damage that the Seller is aware of, Seller and Buyer are lay persons with no expertise in detecting termite damage, and therefore may not be aware of, or fully or accurately describe, any existing problems.

 

          TERMITE DAMAGE.  If the termite inspection reveals any damage, Seller shall pay for the costs to repair such damage, including the cost of repairing or replacing the affected improvements, except that such cost to Seller shall not exceed $_________.  Repairs shall include correcting any structural damage which may be required by the lender to be repaired or restored prior to closing. 

 

If the cost of repair exceeds this amount, and the Buyer does not agree to pay for the excess amount, then Seller shall have the option to cancel the contract by giving written notice to Buyer within ___ (___) calendar days of receipt of the termite report and the estimated cost of such repairs or replacement.

 

          TERMITE INSPECTION CONTINGENCY.     (Buyer or Seller)    shall be responsible for up to but no more than $__________ toward the cost of said termite inspection.  If Seller selects the licensed pest control company, Seller shall be responsible for the total cost of said inspection.

 

TITLE INSURANCE; RESPA RULE RE BUYER'S TITLE INSURANCE CHOICE.  Buyer understands that Seller will be obtaining the title report from (Name of Title Co.) and since it is less expensive to obtain the mortgagee's title policy from the same title company, Buyer authorizes and directs (Name of Escrow Co.) to obtain the mortgagee's title policy from the same company at a cost of $___________, which Buyer agrees to pay at time of closing.

 

VACANT LAND.  This offer is subject to the Buyer's approval of the restrictive covenants, locations and evidence of utilities available and actual hook-up of these utilities, and _______________________.  Seller shall deliver these items to Buyer within five (5) calendar days of acceptance of this offer.  Buyer may declare this contract null and void and recover all deposits if Buyer does not approve of the items; provided, however, that approval will be deemed to be given if written disapproval is not delivered to Seller within five (5) calendar days of receipt of items.