| Agency is for your protection. A Buyer's or Seller's first contact in the home buying or selling process should be with a REALTOR® of choice to establish a relationship. The Missouri State Law requires that a REALTOR® provide a Buyer or Seller with the Missouri Broker Disclosure Form . This form explains the types of relationships available and will assist the Buyer and Seller in determining which relationship best fits their particular needs. Should a Buyer or Seller desire professional representation, the REALTOR® will require a signed agreement. |
| Pre-Approval means that a Buyer has consulted with a lender of choice and has provided the necessary information to complete the process, including social security number. The lender reviews the information, including a credit report, and then issues a pre-approval or approval letter. Some lenders even state in the letter that credit has been reviewed. Many lenders provide this service at no charge, others charge a fee. Buyer should meet with a lender of choice to be pre-approved before investing time into looking for a home. |
| Pre-Qualification means that a potential Buyer has spoken to a lender of choice and the lender states that the Buyer can purchase a home within a certain price range, based upon the information provided at that point in time. This is NOT the same as a pre-approval, as the credit report has not been reviewed. This does NOT position the Buyer as well as pre-approval. |
| Seller’s Disclosure Statement is the Seller’s written statement about any defects, pertinent facts, or other known conditions regarding the subject property that could affect the buying decision. The Buyer should carefully read this statement and address any concerns within the terms of the contract. |
| Lead Based Paint Disclosure identifies any known presence of lead based paint hazards in the subject property. Seller should provide it to the Buyer prior to the writing of the contract. Be sure to read the “Protect Your Family From Lead In Your Home” brochure. |
| Residential Sale Contract is a preprinted form , approved by The Counsel for the ©St. Louis Association of REALTORS® and by the Bar Association of Metropolitan St. Louis for the exclusive use of their members. It is the controlling instrument reciting all of the terms and conditions of the purchase/sale. |
| In order to become familiar with its contents, it is prudent to secure, read and understand the Residential Sale Contract at the beginning of the process. |
| Missouri law does not require the use of an attorney in a real estate transaction. You may wish to consult an attorney, however, if you have any questions about the transaction or the forms. |
| The Earnest Money Deposit is provided for in the Residential Sale Contract . Earnest money is part of the cash consideration and represents a “good faith” commitment and the earnest intent to perform on the part of the Buyer. The larger the earnest deposit, the stronger the offer appears in the eyes of the Seller. Inclusions and Exclusions are to avoid any misunderstandings. The parties involved in a real estate transaction are urged to list as “included” or “excluded” any items which may be subject to question. Many of these items are already printed in the Residential Sale Contract . If there is any question whether or not an item is to convey with the property, it should be written into the Residential Sale Contract . |
| Inclusions and Exclusions are to avoid any misunderstandings. The parties involved in a real estate transaction are urged to list as “included” or “excluded” any items which may be subject to question. Many of these items are already printed in the Residential Sale Contract . If there is any question whether or not an item is to convey with the property, it should be written into the Residential Sale Contract . |
| Contingencies are contained in the Residential Sale Contract including financing, inspections, and title and survey. These contingencies are for the benefit and protection of the Buyer, but they serve both the Buyer and the Seller. When satisfied, these contingencies serve to reduce the risk associated with the scheduled transfer of ownership and possession. Accordingly, it is important that sufficient time be allowed between the satisfaction of all contingencies and the scheduled closing date. |
| The Financing Contingency contains a provision that allows the Buyer to apply for and attempt to secure specific financing as a part of the Residential Sale Contract . This clause requires the Buyer to proceed in good faith and cooperate fully with the lender, including a timely loan application with payment of required fees to the lender. It is recommended that the Buyer who intends to borrow money for the purchase has a bona fide loan pre-approval from a reputable lender before beginning the house hunting process. |
| The Inspection Contingency provides the opportunity for the Buyer to have independent, qualified inspectors inspect the property and improvements and provide the Buyer with written reports at the Buyer’s expense. Professional inspections are always recommended. An Inspection Contingency brochure describes the intended purpose and process in more detail. The Environmental Concerns brochure is also available. |
| The Title and Survey Contingency provides the opportunity for the Buyer to investigate the condition of the title to the property. Title insurance and a boundary improvement (stake) survey are always recommended in order to protect the Buyer against liens and other defects affecting the property. The Title and Survey Contingency Explanation brochure further explains this process. |
| Riders are preprinted forms approved by the Counsel for the ©St. Louis Association of REALTORS® and by the Bar Association of Metropolitan St. Louis for the exclusive use of their members. Some examples are the “House Sale Contingency“, the “Condominium Rider to Sale Contract“, and the “Appraisal Rider“, which can be incorporated in the Residential Sale Contract as needed. |
| Gas Appliance Inspections are an obligation of the Seller. Seller must provide a certification to Buyer that all gas appliances are in safe condition and good working order from an appropriate gas company dated within thirty (30) days prior to closing. Please read paragraph 7 of the Residential Sale Contract for specific details. |
| Code Compliance and Occupancy Permits are required by many municipalities in the area. Governmental jurisdictions vary in their code compliance and occupancy requirements. Generally, a Seller requests any required inspection (s). Upon satisfaction of the inspection (s) and prior to closing, Buyer obtains an occupancy permit. A nominal fee may be charged for inspections and/or permits. |
| Homeowner’s Hazard Insurance is required by the lender. The actual policy and paid receipt for the first year’s premium are generally required to be in the lender’s possession at least ten (10) days prior to closing. The policy must contain a loss-payable clause in favor of the lender, and the insuring company must be acceptable to the lender. |
| Prior To Closing utility change over and walk through of the property are recommended to be performed prior to closing. A Seller should provide items integral to the property, such as instruction manuals, warranty papers, garage door openers, keys, and alarm and garage door opener codes. A Seller should leave the property in presentable, clean condition. It is recommended that the Buyer have locks and codes changed after closing. |
| Closing (Settlement, Escrow) is the exchange of the deed for the purchase price. The closing is normally held at the office of a title insurance company. Immediately prior to the real estate closing, the Buyer will execute all of the documents required by the lender in order to close the loan on the property, either at the lender’s office or at the title insurance company. Normally, the Buyer closes first and the Seller closes later in the day. Often the Buyer and Seller close at different title companies. Buyer and Seller are each responsible for closing charges as defined in the contract. The closing date should be carefully chosen to avoid the 15th, 30th or 31st of a month to lessen the possibility of delays. |
| The Conveyance of a property is normally by General Warranty Deed and is subject to recorded deed restrictions easements, rights of way, etc. Most residential properties have restrictions such as utility easements, and most subdivisions have indentures containing use restrictions and trustee assessments. Strict zoning laws such as building lines and land use restriction are applicable in most of the metropolitan areas. The Deed of Trust is the security instrument for the debt as evidenced by the Note which recites the terms of the loan. |
| The Deed of Trust is recorded at the County/City recorder’s office immediately after the General Warranty Deed has been recorded. After recording, the Deed of Trust is held by the lender until the note is paid in full. At that time, it should be forwarded, along with a recorded Deed of Release, to the Signatory. |
| Real Estate Tax is to be prorated as of the date of closing per the terms of the contract . |
| “It is important to both Buyer and Seller throughout the home buying and selling process from pre-approval through closing that all times and dates by met.” |
As members of the National Association of REALTOR® , REALTOR® are actively engaged in the real estate business; bound by a Code of Ethics to provide good advice and honest treatment; and are committed to continuing education for updating their knowledge and skills. |
