The standard sales contract in the DC/MD/VA area is 10 pages long. Then, always included, is a 6-page addendum which incorporates Virginia’s specific legal requirements. But wait, there’s more! There will typically be another 3-page general contingency* addendum (multiple-choice), plus at least one or two more contingency or other addenda, so we are talking a minimum of 20 pages, and often 25 pages or more.
Here is a summary of the main items:
- The amount of money being paid for the property (the “sales price”);
- How it’s being paid for – cash, or financing;
- If it’s being financed, the amount of the down payment and the specific financing the purchaser is seeking;
- How much “earnest money” the purchaser is willing to risk;
- The amount of money, if any, the seller is going to contribute to the purchaser’s costs of purchase (the “seller subsidy”);
- When and where the settlement is supposed to occur;
- Which party arranges and pays for the necessary termite inspection;
- Who arranges and pays for well and/or septic inspections; and,
- What contingencies must be satisfied, and when.
The contract is likely to be contingent on:
- The purchaser qualifying for the specified financing;
- The purchaser, or usually their mortgage company, obtaining an appraisal at no less than the sales price; and/or,
- The purchaser’s home inspection – which may result in another addendum requesting repairs.
The contract may also be contingent on:
- The purchaser’s satisfaction with the information provided in the Property Owners’ Association Disclosure Packet and/or the Condominium Unit Owners’ Association Resale Packet;
- The purchaser’s radon testing results;
- The sale and/or settlement of the purchaser’s current property;
- The seller purchasing another home; and/or,
- The approval of a third party, such as the seller’s mortgage company.
There are other less common contingencies or clauses. We can discuss these as they arise.
* Contingency: An event or action that is necessary for the contract to remain valid.