This home purchase agreement has some standard protections but also has 3 high-risk terms you should look at before signing. The forced arbitration clause limits your legal options. Several key deadlines need to be added to your calendar right away.
All disputes must go through arbitration. You give up your right to a jury trial. This is common in real estate but limits your legal options.
You accept the property "as is" with all problems, hidden or visible, after the sale is recorded. It is very important to inspect the home fully before closing.
Several deadline fields are blank. The buyer must fill in all dates before signing to protect the deposit.
If the buyer backs out, the seller can only keep the deposit. The buyer is protected from being sued for more money.
Section 13 says the buyer must accept the property "as is" with all problems, hidden or visible, after the sale is recorded. This means any issues found after closing are the buyer's problem. The seller gives no promises about the home's condition.
"...after recording, the Buyer shall accept the Property AS IS, WHERE IS, with all defects, latent or otherwise. Neither Seller nor their licensed real estate agent(s)... shall be bound to any representation or warranty of any kind relating in any way to the Property or its condition, quality or quantity..."
Section 22 says all disputes must be settled through arbitration. This means you give up your right to a jury trial. While this is common in real estate, it greatly limits your legal options if problems come up after closing.
"The Parties agree that any dispute or claim in law or equity arising between them out of this Agreement... which is not settled through mediation, shall be decided by neutral, binding arbitration."
Several important deadline fields in this agreement are blank. This includes dates for loan verification, inspections, and title reviews. Signing with blank dates creates confusion that usually works in the seller's favor.
Section 24 says the seller can keep showing the home and take other offers until the buyer gets word that their offer is accepted. This means you could lose the home even after putting down your deposit.
"Seller has the right to continue to offer the Property for sale and to accept any other offer at any time prior to notification of acceptance."
If the buyer backs out, the seller can only keep the deposit. The buyer cannot be sued for extra money, forced to buy the home, or made to pay the seller's legal fees. This is a strong protection for the buyer.
The buyer can hire licensed inspectors and other pros to check the property. If problems are found, the buyer can bring them up and negotiate. Or the buyer can walk away and get the deposit back.
The buyer gets title insurance for the full purchase price. This protects you if ownership problems or unpaid debts on the property come up after closing.
The buyer can get a survey to find boundary problems or land size issues. If problems are found and the seller cannot fix them, the buyer can cancel and get the full deposit back.
All underground rights to water, gas, oil, and minerals go to the buyer at closing. This matters in areas where these resources could have value.
Since the home is sold "as is," ask the seller to pay for a 1-year home warranty covering major systems (heating/cooling, plumbing, electrical). It usually costs $400-$600 and gives you peace of mind.
"Seller shall provide, at Seller's expense, a one-year home warranty from [Warranty Company] covering major systems and appliances, effective from the Closing date."
The normal inspection window may be too short for special checks like the foundation, septic system, or well. Ask for at least 10-14 business days so you can check everything.
"Buyer shall have until [specific date], which is fourteen (14) business days from the Effective Date, to complete all inspections and investigations of the Property."
Section 6 says closing costs can go to either side or be split. If the market favors buyers, push for the seller to pay some or all of the closing costs.
"Seller agrees to pay up to $[amount] toward Buyer's closing costs and prepaids, including but not limited to title insurance, recording fees, and loan origination fees."
This agreement forces all disputes into arbitration. Your client gives up the right to a jury trial. Make sure they understand this before signing.
Review Sections 3, 8, 9, 11, 12, 16, and 27 - ensure all deadline dates are specified
Book a licensed inspector for a full checkup before the deadline
If using bank financing, obtain letter verifying credit, income, and funds
Work with the title company to start the title search as soon as you sign
Decide if a land survey is needed based on the property's features
If property built before 1978, ensure Lead-Based Paint Disclosure is attached (Section 30)
Section 17 references NSOPW.gov - advise client to check neighborhood registry