Brief Explanation Of The STL Residential Sales Contract

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St Louis Realtors Standard Residential Sale Contract

Following is a brief explanation of the St Louis Realtors standard Residential Sale Contract which is most commonly used for residential sales that are handled by realtors in the St Louis Metropolitan area.  The Special Sale Contract is also available but is used less frequently.  It is not as protective of the buyer and is generally used for “as-is” sales, foreclosures and short sales.
The Residential Sale Contract was revised in January of 2019.  Most of the changes are subtle and brought about mostly because of new technology.  We are now up to nine pages.  I can remember back to 1 legal size page.  Yikes.

I suggest you read through a blank STL standard Residential Sale Contract (contact me for a copy) using this abbreviated explanation. If you have any questions, please contact me.
Any timed contingencies start counting at the “Acceptance Deadline”. To determine this date, look at the final acceptance of your contract. This could be the actual contract itself or a “counter”. The acceptance deadline is the time that was put in as the acceptance time (usually immediately above the signature).

  • Paragraph 1 – Make sure your name is correct as to the way you want to take title. It is usually a good idea to use a middle initial or name to eliminate confusing you with another person of a similar name in the future.
  • Paragraph 2 –  The Inclusions and Exclusions paragraph has been updated to clarify electronic equipment and window treatments.
  • Paragraph 3 – This is the amount of the offer you are making and the amount of earnest money you are offering.
  • Paragraph 4 – If you are making the offer contingent on financing, the box should be marked accordingly. The date that is filled in is the date by which you will have a written letter from your lender with the terms and conditions of the loan the bank will give you.  This is called a loan commitment.  This date is very important because if you do not have loan commitment by this time and let it slip by you have forfeited the contingency and could be forced to close or forfeit your earnest money. Also in this paragraph it is important to fill in the terms of the loan. For example, if the interest rates should all of a sudden go up by 3 percentage points, you may be able to qualify but it would break your budget.  This paragraph now includes a dedicated section for seller paid closing costs.  If you are asking for concessions from the seller, there is a place to fill in at the bottom of this paragraph.
  • Paragraph 5 – This clause lines out the day of closing, when and where it will take place (usually at the title company) and when you will take possession. This can be a sticky wicket on the day of closing.   In the “old” days, the lender came to the title company on closing day with a check.  Today, most of the banks wire the funds.  Today even if the buyer has signed, possession/ownership does not transfer until “funding” which is when the monies arrive at the title company.  This verbiage “All parties agree to sign Closing documents at a time that facilitates this possession. Note: If possession is to be delivered on a day other than Closing, as defined above, parties should complete the appropriate rider.” has been added to the Residential Sale Contract to alleviate some of the move-in delays this has created.  (By the way, the lender usually sends their loan packet and/or a representative of the bank to the title company so that there is only one place to go on closing day.)
  • Paragraph 7 is self explanatory.
  • Paragraph 8 – This contingency is handled by the title company of your choice. Once you are in a price agreed contract, your real estate agent sends the sales contract to the title company and they start the examination of title to determine that there are no encumbrances and that the person selling is the rightful owner, etc. This contingency is generally 25 days from the acceptance date of the contract which is plenty of time. At closing the title company charges you for title insurance. This insurance is required by the bank. Here is a link to a very good explanation of title insurance and why you need it.  More info, And yet more info
  • Paragraph 9 – Explains the much talked about “closing costs”. Your lender is required to go over these at the time you apply for a loan. These costs are often requested as a credit from the seller at closing – especially if you are short of funds.  The updated contract has verbiage about cost of wire protection letter.
  • Paragraph 10 – this is the building inspection contingency. This link will explain this contingency in depth.
  • Paragraph 10a – is a timed contingency for buyers to check with an insurance company to make sure they are able to get homeowners insurance. This is a somewhat recent addition to the contract. If the seller of the property or if you the buyer, have had excessive insurance claims in the past there could be issues.
  • Paragraph 11 – many of the STL municipalities have “occupancy” inspections. This paragraph covers the sellers obligation to the buyer. Please make sure the amount of people who are going to occupy the property is filled in because some of the municipalities have limits based on square footage and number of bedrooms.
  • Paragraph 12 – this is about who holds the earnest money and what happens in the event the contract is terminated.
  • Paragraph 13 – this paragraph covers what happens in the event you and/or the seller default (just decide not to buy or sell the house).
  • Paragraph 14 – this covers you if something unforeseen happens to the property from the time you have entered into the contract until the day of closing, i.e. damage to the home from a fire, etc.
  • Paragraphs 15, 16, 18, 19 & 20 are self explanatory
  • Paragraph 17 is requires disclosure of being a foreign investor.
  • Paragraph 20 – if at any time during the process it is discovered (and had not been disclosed) that the home is in a flood plain, you have the right to terminate the contract.
  • Paragraph 21 – this is the spot to write in other requests of the seller like asking for a home warranty or closing costs etc.
  • Paragraph 22  is a disclaimer regarding square footage.
  • Paragraph 24 is detailed information regarding agency.
  • On page 9 – this is where you will be signing and giving the seller a deadline for answering which is usually 24 hours but varies with the circumstances.

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