If you have read this information before you have signed a sales contract with the seller of the property, here are some important points to consider regarding that contract.

The sales agreement you and the seller sign can expressly state which settlement costs you will pay and which will be paid by the seller although some may be negotiable up to time of settlement. Buyers can and do not negotiate with sellers as to which party is to pay specific settlement costs. The success of such negotiations depends upon factors such as how eager the seller is to sell and you are to buy, the equality of the home itself, how long the home has been on the market, whether other potential buyers are interested, and how willing you are to negotiate for lower costs. If the contract is silent on these costs, they are still open to negotiation.

There is no standard sales contract which you are required to sign. You are entitled to make any modifications or additions in any standard form contract to which the seller will agree. You should consider including the following clauses:

• The seller provides title, free and clear of all liens and encumbrances except those which you specifically agree to in the contract of approve when the result of the title search are reported to you. You may negotiate as to who will pay for the title search service to determine whether the title is "clear"

• A refund of your deposit (earnest money) shall be made by the seller of escrow agent with cancellation of the sale if you are unable to secure from a lending institution a first mortgage or deed-of-trust loan with an amount, interest rate, and length of term, as set forth in the contract, within a stated time period, or if the Seller is unable to satisfy any other condition of the Sales Contract.

• A certificate shall be provided at time of settlement, stating that the home is free from termites or termite damage.

• A certificate or other assurance shall be provided by the Seller at the time of settlement, stating that the plumbing, heating, electrical systems and appliances are in working order, and that the home is structurally sound. Negotiate who pays for any necessary inspections. There is no uniform custom in most areas. Most buyers prefer to pay for these inspections because they want to know that the inspector is conducting the service for them, not for the seller. (In many areas, you can also purchase a warranty to back up the inspection, if you wish.)

• An agreement on how taxes, water and sewer charges, condominium fees, premiums on existing transferable insurance policies, utility bills, interest on mortgages, and rent (if there are tenants) are to be divided between buyer and seller as of the date of the settlement.

Before you sign the sales contract, make sure that it correctly expresses you agreement with the seller on such important details as the sales price of the home, method of payment, the time set for your taking possession, what fixtures, appliances, and personal property are to be sold with the home, and the other items described above.

The above list is not complete, but does illustrate the importance of the sales agreement and its terms. Before you sign a sales contract you may want to ask an attorney to review the proposed agreement and determine if it protects you interests, for once signed the contract is binding on you and the seller. If you do not know of an attorney, you may wish to consult the local bar referral service or neighborhood legal service office.

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