This information is designed to acquaint prospective home Buyers and Sellers with the customs and procedures of the local real estate market.

“It is important to both Buyer and Seller throughout the home buying and selling process from pre-approval through closing that all
times and dates be met.

Agency is for your protection. A Buyer’s or Seller’s first contact in the home buying or selling process should be with a REALTOR® of choice to establish a relationship. The Missouri State Law requires that a REALTOR® provide a Buyer or Seller with the Missouri Broker Disclosure Form. This form explains the types of agency relationships available and will assist the Buyer and Seller in determining which agency relationship best fits their particular needs. Should a Buyer or Seller desire representation, the REALTOR® will require a signed agreement.

Pre-approval means that Buyer has consulted with a lender of his choice and has provided the necessary information to complete the approval process, including social security number. The lender reviews the information, including a credit report, and then issues a pre-approval or approval letter. Some lenders even state in the letter that credit has been reviewed. Many lenders provide this service at no charge, others charge a fee. Buyer should meet with a lender of choice to be pre-approved before investing time into looking for a home.

Pre-qualification means that a potential Buyer has spoken to a lender of choice and the lender states that the Buyer can purchase a home within a certain price range, based upon the information provided at that point in time. This is not the same as a pre-approval, as the credit report has not been reviewed. This does not position the Buyer as well as pre-approval.

Seller’s Disclosure Statement is the Seller’s written disclosure of any defects, pertinent facts, or other known conditions regarding the subject property that could affect the buying decision. The Buyer should carefully read this statement and address any concerns within the terms of the contract.

Lead Based Paint Disclosure is provided by the Seller to notify the Buyer of any known lead based paint hazards in the subject property. The Disclosure also requires the Buyer to receive the pamphlet entitled, “Protect Your Family From Lead in Your Home” brochure.

The Residential Sale Contract is a preprinted form, approved by Counsel for the St. Louis Association of REALTORS® and by the Bar Association of Metropolitan St. Louis for the exclusive use of their members. It is the controlling instrument reciting all of the terms and conditions of the purchase/sale. In order to become familiar with its contents, it is prudent to secure, read and understand the Residential Sale Contract at the beginning of the process.Missouri law does not require the use of an attorney in a real estate transaction. You may wish to consult an attorney if you have any questions about the transaction or the forms.

The Earnest Money Deposit is provided for in the Residential Sale Contract. Earnest money is part of the cash consideration and represents a “good faith” commitment and the earnest intent to perform on the part of the Buyer. The larger the earnest deposit, the stronger the offer appears in the eyes of the Seller.

Inclusions and Exclusions are to avoid any misunderstandings. The parties involved in a real estate transaction are urged to list as “included” or “excluded” any items which may be subject to question. Many of these items are already printed in the Residential Sale Contract. If there is any question whether or not an item is to convey with the property, it should be written into the Residential Sale Contract.

Real Estate Tax is to be prorated as of the date of closing per the terms of the contract.

Contingencies are contained in the Residential Sale Contract including financing, inspections, and title and survey. These contingencies are for the benefit and protection of the Buyer, but they serve both the Buyer and the Seller. When satisfied, these contingencies serve to reduce the risk associated with the scheduled transfer of ownership and possession. Accordingly, it is important that sufficient time be allowed between the satisfaction of all contingencies and the scheduled closing date.

The Financing Contingency contains a provision that allows the Buyer to apply for and attempt to secure specific financing as a part of the Residential Sale Contract. This clause requires the Buyer to proceed in good faith and cooperate fully with the lender, including a timely loan application with payment of required fees to the lender. The Buyer must notify the Seller of the Buyer’s inability to obtain financing by delivering written notice before the loan commitment date written on the contract. It is recommended that the Buyer who intends to borrow money for the purchase has a bona fide loan pre-approval from a reputable lender before beginning the house hunting process.

This information was prepared by the St. Louis Association of Realtors, and to be used exclusively by Realtors.