Make Sure the Contract Covers Everything

Imagine you find your dream home. It's 10 years old and listed for $200,000. You offer to pay $185,000 and the owners accept your offer.

All too often, questions like this go unanswered until you reach the settlement table. If the contract is silent about the drapes and other items, arguments are sure to arise between the buyers and sellers. Disputes easily can be avoided if the buyers, sellers, and their real estate agents prepare a well-thought-out contract.

When buying or selling a home, remember that no transaction has occurred until you reach settlement, which is where the property transfer actually takes place.

For the settlement company, the contract is King: If the contract doesn't specifically state that an item is to convey (go to the buyers), then, it doesn't -- period. So if the contract doesn't say the curtains stay, then the sellers can take them. Likewise for the washer/dryer, refrigerator, and even the landscaping. (Sellers have been known to dig up the rose bushes!) Generally, any item that is bolted to or made a part of the home will convey unless otherwise specified.

Also, if the contract doesn't say the seller pays the points, the buyers better not expect them to do so. You can imagine the fights at settlement when verbal commitments are not reflected in the contract.

To make the process go well, be sure the contract covers everything. You should do this when the contract is first written and signed, but amendments later are okay, too -- provided both parties sign the amendment.

Use as much detail as possible in the contract. Standard contracts convey many items, but the choices are not always all inclusive and an item the buyers clearly want may be overlooked. To avoid this, buyers must make sure that everything they want conveyed is included in the contract and that the sellers acknowledge it in writing.

Remember: The settlement table is a poor place to try to renegotiate a contract. If all the terms are in writing, you'll avoid confusion. Be sure to write into the contract such stipulations as whether certain repairs are to be made before the final walk-through, or if the basement freezer comes with the house. Make no assumptions and don't let the other party's agent fool you into thinking that if it wasn't mentioned, it will be yours. Although the settlement company can help resolve differences, it can only enforce what is written in the contract.

Ask your real estate agent to tell you what conveys and what doesn't. Speak up if you suspect an item is not mentioned, for even the best real estate agents may miss what you see.

Above all, put it in writing. A properly written contract can help you avoid surprises on closing day.

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