Buying and selling real estate can be overwhelming and confusing.
In Virginia, most contracts to buy and sell residential real estate are on forms approved by the Northern Virginia Association of Realtors (NVAR). Even many FSBO (For Sale by Owner) sellers may insist that prospective buyers use these forms if they have legal permission to use them. Because buyers and sellers largely rely on the NVAR sales agreement to buy and sell real estate, there are things you need to understand before entering into them.
Here are 5 Things to Know About NVAR Contracts:
1. Agency Agreement Required: Effective since July 2, 2012, Virginia law now requires that a buyer and an agent who have agreed to work together in an agency relationship set out the terms of that agreement in writing. What is the purpose? The new legislation is intended to ensure that the obligations of the agent and the buyer are established at the outset of representation, and set forth in clear and understandable terms.
2. Exclusive Right-to-Sell v. Exclusive Agency:Under an exclusive right-to-sell agreement, the listing firm is compensated in the event of a sale regardless of who ultimately secured a buyer. Under an exclusive agency agreement, the seller only offers compensation to the listing firm if the purchaser is procured by the firm.
3. Representations and Warranties:The Regional Sales Contract contains a number of representations and warranties by the seller about the condition of the property. In addition to provisions warranting that the house is in working order and pest-free, paragraph sixteen (title) states that the seller will comply with all orders, requirements or notices of violations of any county or local authority, home owners association, or actions in court against or affecting the property.
The NVAR interprets this to mean that the seller can be required to make any repairs necessary to ensure that the property is delivered to the purchaser in the same condition that the seller promised in the ratified contract.
4. Home Inspection Contingency: A home inspection is often conducted after a contract for sale is ratified. The home inspection contingency is intended to provide the purchaser with the option of requesting additional repairs that are not already covered within the contract, or an option to cancel the contract if the inspection uncovers something that causes the purchaser to reconsider his intent to purchase the property.
5. Financing Contingencies: It is a common misconception that, if a contract contains a financing contingency, the purchaser will be absolved of liability in the event financing is not approved.
However, a purchaser can only escape liability if the contingency has not been removed, and if the purchaser receives a written rejection letter for the financing specified in the contract, which is then delivered to the seller.
The best way to protect your legal real estate interests is to hire a knowledgeable attorney. With the Northern Virginia housing market picking up steam, knowing your legal real estate rights should be a priority.
Fairfax Real Estate Lawyer: If you’re looking for an experienced Virginia real estate law attorney or Virginia property lawyer, contact Keithley Law, PLLC, PLLC today by calling (703) 454-5147and schedule an initial consultation in our Fairfax law office.
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