Buyers, Know Your Contract
By Julie Kershner
Buying property in Los Cabos is an exciting venture, however like the saying goes, “don’t leave your brains at the border!” When writing the Offer to Purchase your dream property in Los Cabos, protect yourself. Be knowledgeable about the components of the contract.
1 How am I paying for this? Because financing is not readily available, the vast majority of purchases are made in cash. Unfortunately, some agents don’t consider the source of funds. If there is a 3rd party involved in the process, i.e. a bank loan, relative loan, etc., make sure you include a financing contingency in the offer. Many times an agent will present a contract, and when I ask the source of funds the answer is a bank loan in the States. I reply, you should include a financing contingency and they are surprised, as the buyers are not asking for owner financing and will be wiring the cash to escrow. A financing contingency is protection for the buyer.
2 Another possibility regarding the source of funds, if there is a house closing involved and the purchase will be paid from the proceeds of the closing, a house closing contingency protects the buyer.
3 If the purchase is for a house or condo, new construction or resale, include an inspection contingency. Even new construction may have issues to be corrected. An inspection contingency protects the buyer.
4 If you are purchasing in a planned community with an active Home Owners Association, be sure to obtain a copy of the Rules and Regulations. Perhaps there are restrictions against pets on property. If you have a beloved pet, this would be of great interest to you. A deeds restriction contingency protects the buyer.
5 If you are purchasing raw land outside of a master planned community, you probably would like to know the dimensions and location of the lot lines. A survey contingency protects the buyer.
6 If you are purchasing a furnished property, ask for an inventory contingency. This insures there are no misunderstandings as to what items are included in the sale. An inventory contingency protects the buyer.
7 If the property is rented or has future rentals, insist on clarifying the situation prior to mutual acceptance on a contract. A “tenant occupied clause” protects the buyer.
There are many other items which may be needed, depending on the situation, but remember, a simple offer to purchase with no contingencies will not offer any protection to the buyer.
Truthfully, in a real estate purchase, both parties want the same thing. The protections afforded to the buyer through various contingencies, also benefit the seller, as it clarifies the situation for all parties. When both parties end up happy, it’s a win/win for everyone.
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