Real estate contracts can vary substantially from city to city or state to state. We are often asked what is included in contacts for real estate in Las Vegas, so below we have provided an overview. We do use the standard Greater Las Vegas Board of Realtors purchase contract which contains many provisions for the protection of both buyers and sellers. The only exception to using a standard GLVAR contract would be when purchasing Las Vegas new homes from a developer. In that case the purchase contract is supplied by the developer.
So when you have finally identified the perfect home for your family, your agent will write up a purchase contract including all terms of the sale. Terms of the sale will include the following items of importance, as well as other miscellaneous provisions:
a) Sales price you are offering to the seller.
b) Earnest deposit - Also known as the EMD, the earnest money deposit is up front money that must be presented along with the contract. Earnest deposit is typically between $2,000 to $10,000 for homes in the average price ranges, but may be as much as $100k or more for upscale properties. Earnest deposit checks are not cashed until all parties have executed a contract. Once all parties have agreed to the contract, the earnest money is deposited into the escrow company's account and is used as a credit towards the sales price.
c) Terms of payment for the property - new Las Vegas mortgage or all cash sale. This will include the total amount of the down payment the buyer will be making and the type of loan they will be getting (FHA, VA, Conventional), if applicable.
d) Who the closing company will be - in Nevada we use escrow companies that act as our neutral third party. They make sure all the terms relating to paperwork and transfer of funds are carried out according to the contract. Among other duties, the escrow officer: orders the title report to make sure that the new buyer is getting a clear title, orders payoff demands from the previous lender and the homeowner's association to make sure those liens are paid in full by the seller, reviews loan documents sent over by the buyer's new lender (if any), collects funds to close from the buyer, has both buyers and sellers sign all documents relating to the sale and notarizes signatures.
e) Date of closing, also known as COE or close of escrow - in Nevada, buyers and sellers will sign documents and bring in funds a day or two before the property is recorded in the new buyer's name at the Clark County Recorder's office. Until the property is recorded at the Recorder's office, keys and access to the property are not granted to the buyer unless otherwise agreed upon in writing between buyer and seller.
f) Due diligence period - after a contract is accepted and executed (signed) by all parties, the buyer usually has a specified period of time to perform inspections, have an appraisal done, review Home Owner's Association (HOA) records, etc. This is called the buyer's due diligence period, and is typically ten days unless agreed upon otherwise in the contract. The seller is obligated to provide the Homeowner's Association Documents, and the buyer has five days to review those documents once delivered. Sometimes it is hard to obtain these documents from the HOA in a timely fashion. If so, the due diligence period will have to be extended to accommodate the buyer's 5 day review. Another issue that may extend the due diligence period is getting utilities turned on for the inspection. Again the due diligence period might have to be extended. During the due diligence period if the buyer is not satisfied with the HOA documents or inspections, or if the appraisal does not meet the purchase price and the seller refuses to lower that price, the buyer may give notice in writing to cancel the sale and receive the earnest deposit back. Both buyer and seller must sign the cancelation to release funds from the escrow company. It happens very infrequently, but should the seller refuse to sign or if the seller disputes the distribution of funds, the buyer may need to seek a court order to release those funds.
g) Inspections - all buyers are advised to have a professional home inspector go through the home on their behalf for all Las Vegas homes, even brand new ones. If the buyer chooses to have someone other than a qualified professional do the inspection, the seller may not be obligated to perform repairs.
h) Home Warranties - it is customary to ask the seller to pay for a one year home warranty covering the major operating systems of the property including A/C, heating, plumbing, and built in appliances like stoves, dishwashers and hot water heaters. Additional coverage may be applied at extra cost for swimming pools and hot tubs. Home warranties are a "negotiable" item, however, and if the seller does not wish to pay for it, the buyer may elect to purchase their own policy.
i) Closing costs - our contracts are very comprehensive and define who will be paying for the specific closing costs associated with the transaction. Typically the buyer will pay for: one half of the escrow fee, HOA transfer fees, HOA capital contributions, appraisal, home inspections, real estate brokerage administration fee, homeowner's insurance policy and any lender associated fees including lender's title insurance, processing, discount points, loan origination and underwriting. In addition the escrow company will prorate taxes, HOA dues, sewer use fees, and insurance between buyers and sellers at the close of escrow. In some cases, the buyer may request that the seller pay for all or a portion of the buyer's normal closing costs, but that is usually reflected by an increase in the sales price. Typical seller's costs include: Commissions, one half of the escrow fee, title policy, Nevada real estate transfer tax, home warranties, covered repairs and real estate brokerage administration fees. (Keep in mind that the banks holding Las Vegas foreclosures may not agree to pay for many typical seller costs.)
j) Personal property - according to our contracts, certain items must automatically stay with Las Vegas homes for sale unless otherwise agreed upon in writing. These items would include: window coverings, light fixtures, ceiling fans, stoves, dishwashers, range hoods, built in microwaves, soft water systems, reverse osmosis systems, alarm systems, pool equipment, etc. Refrigerators, washers and dryers are all considered personal property and may be removed by the homeowner unless otherwise agreed to in writing in the purchase contract, or if already included in the property listing in the MLS.
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