Buying your first home in Richmond, VA? 9 things every purchase agreement should have
Purchasing your first home in Richmond, VA, is an exciting milestone, but it’s essential to understand the details of your purchase agreement. This legally binding contract outlines the terms of your home purchase, protecting both you and the seller. Before signing on the dotted line, make sure your agreement includes these key elements.
- Purchase price and earnest money deposit
The purchase price is the agreed-upon amount you’ll pay for the home. Your agreement should also specify the earnest money deposit, which demonstrates your commitment to the purchase. In Richmond, deposits typically range from 1% to 3% of the home’s price and are held in escrow until closing.
- Financing and loan contingency
Unless you’re paying in cash, your purchase agreement should include a financing clause. This contingency ensures that if you’re unable to secure a mortgage, you can exit the contract without penalties. Be sure to review the financing terms, including your loan type, interest rate, and deadlines for securing approval.
- Home inspection contingency
A home inspection contingency gives you the right to have the property professionally inspected. If significant issues arise – such as structural damage or outdated electrical systems – you can negotiate repairs or back out of the deal. Given Richmond’s mix of historic and modern homes, an inspection is crucial for identifying potential problems.
- Appraisal contingency
Your lender will require an appraisal to confirm the home’s market value. If the appraisal comes in lower than the agreed price, an appraisal contingency allows you to renegotiate the price or withdraw from the contract. This protects you from overpaying for the property.
- Seller disclosures
Virginia law requires sellers to disclose known defects in the property. The purchase agreement should outline what disclosures the seller has provided, including details about past repairs, environmental hazards, or zoning restrictions. Richmond’s historic homes may have additional considerations, such as lead-based paint or outdated plumbing.
- Closing costs and responsibilities
Your Virginia real estate purchase agreement should specify which party is responsible for various closing costs. Buyers in Richmond typically pay for home inspections, loan origination fees, and title insurance, while sellers cover real estate commissions. However, these costs are negotiable, so review this section carefully.
- Possession date and move-in terms
The possession date determines when you can officially move in. Sometimes, sellers request extra time to vacate, so make sure your agreement states a clear move-in timeline. If you need immediate possession, consider negotiating a rent-back agreement or other terms.
- Contingency for title review
A title review ensures the seller has clear ownership of the property. Your purchase agreement should include a title contingency, allowing you to withdraw if liens or ownership disputes arise. Working with a reputable title company in Richmond can help prevent complications.
- Home warranty (If applicable)
A home warranty can provide additional peace of mind, especially for first-time buyers. If the seller offers a warranty, ensure the terms and coverage are detailed in the contract.
By understanding these essential elements of your purchase agreement, you can navigate your first home purchase in Richmond, VA, with confidence. Always work with a knowledgeable real estate agent and attorney to ensure a smooth transaction.
As a first-time buyer of homes for sale in Richmond, VA, tap into the expertise of Associate Broker Blake Poore and his team to ensure a smooth transaction.
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