Real Estate Contracts

“Clean” is a term that is often used to describe an offer on a house. A “clean” offer does not refer to the price of the house, but to the terms of the agreement. If you really want a particular house, the “cleaner” you can make your offer, the better.

What are the characteristics of a clean contract? A contract is considered “clean” when the buyers are paying cash or are clearly qualified for a mortgage, the sale isn’t contingent on the sale of another home, the buyers don’t ask the sellers to carry any of the financing, and if the closing date coincides with the sellers’ needs. A clean contract doesn’t have any unusual requests for repairs or insistence that certain articles convey that would not ordinarily stay in the house. A clean offer has an important competitive edge if you are offering less than full price or if you are in a situation where there is more than one offer on the property.

Most purchase agreements contain language that requires a home to be free of trash and debris and “broom clean” at closing. While this language is not precise, the general idea is that you should convey a clean house to your buyers, one in the same condition that you hope to find your new home.

When the movers leave with your furniture, you may even want to consider hiring a professional cleaning service to thoroughly clean the home. It is crucial to leave your house as pristine as possible for the new owners. This includes getting rid of any leftover junk in the storage spaces. When the buyers show up for their final walk-through, they will feel much better about finalizing the sale if everything sparkles. This will set up a positive mood for completing the transaction and help to minimize any disputes at the closing.

If you are the owner of an investment property, you are responsible when something breaks down in the building. So when the tenants call with an emergency, you will need to have a list of local repair companies you can contact, and money in the bank to pay for their services.

One of the best ways to protect your property investment is to purchase a home warranty that covers your home against unexpected system breakdowns that can be costly, particularly if the heating or plumbing systems need repair. The yearly cost of a good home warranty is probably less than the cost of replacing a broken water heater. If your property is older, a home warranty will provide you with greater security and peace of mind.

Another way to plan for investment property repairs is by building up a monthly surplus account, where part of your positive cash flow can sit in preparation for the day some major repair is needed. Having a “rainy day” fund will relieve you of financial stress when something has to be fixed.