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What is a purchase agreement?

A purchase agreement is a document that is just as important as the deed itself. It should contain an accurate description of the property and all of the terms of the sale, including the price, the terms of payment, the type of deed to be given, the date of possession, provisions for the furnishing of title evidence, proration of real estate taxes and casualty losses, and matters on which the buyer may want to make the purchase contingent, such as financing, inspections, the sale of an existing residence, etc. In many cases, provisions for items of personal property or fixtures may be needed. 


Is a purchase agreement enforceable? 

To be enforceable, a purchase agreement must be in writing and must be signed by both the seller and buyer and, if the seller is married, by the seller’s spouse. The reason for this is that the seller’s spouse has an interest in the property (known as dower rights) that cannot be taken away without consent.


What is Ohio’s Residential Disclosure Law? 

Under Ohio’s residential disclosure laws, the seller of a home, except in limited circumstances, must disclose to prospective buyers certain information concerning the condition of the home. The information must be disclosed on a form prescribed by Ohio’s Department of Commerce. This form is known as the Residential Property Disclosure Form. The form must be signed by the seller, and the buyer must acknowledge receipt of the form. The seller’s disclosure contained in the form is limited to conditions known to the seller and is not a substitute for a professional inspection of the home. 


How do I finance a home purchase?

Home purchase financing options vary depending on your income, savings, credit record and life situation. Conventional mortgages frequently offer an attractive mix of being low risk and having low interest rates and lender fees. The federal government now regulates interest rates, fees and costs, and borrower eligibility for conventional mortgage loans under recently enacted “qualified mortgage” rules.

If you don’t qualify for a conventional mortgage due to past credit challenges, including bankruptcy or foreclosure, you may qualify for a Federal Housing Administration (FHA) loan. An FHA loan is generally offered at regular market interest rates but allows you to buy a home with a down payment of only about 3.5 percent. An FHA-regulated appraisal and inspection are required, which is typically more in-depth than conventional mortgage appraisals and inspections. FHA mortgages include a required FHA mortgage insurance premium, which is usually included in the original loan. FHA mortgage insurance premiums usually cost less than private mortgage insurance. 


First-time homebuyers may be eligible for one or more of the programs offered by the Ohio Housing Finance Agency (, and veterans may be eligible for VA loans through the U.S. Department of Veterans Affairs (​).


What is title insurance? 

Title insurance policies are contracts between you and an insurance company. Under the terms of the policy, the company ensures that you hold a marketable title to the real estate described in the policy. Title insurance policies cover you against defects of title; however, there are exceptions to coverage that will be contained in the policy, and you and your attorney should carefully review the list of exceptions. The “Amount of Insurance” listed in Schedule A of the policy is the maximum amount that the company will pay if a title defect arises that is covered by the policy. This amount of insurance is usually the purchase price of the real estate. 

Do I need closing protection coverage?

Ohio law now mandates that closing protection coverage be offered to all parties in a closing transaction: the seller, the buyer and the lender. For a nominal cost, you may elect to buy closing protection coverage for yourself. The insurance underwriter provides this protection for you in case the closing agent steals the closing funds or fails to follow closing instructions provided by the parties. Your purchase of title insurance alone does not protect you against those actions, and you may want to buy closing protection coverage before you hand over funds to the closing agent.

What does closing involve? 

Ohio closings occur either in escrow or at a round table meeting. In an escrow closing, the closing agent collects all closing funds and documents from the parties. Following verification of all funds and documents and any other closing instructions the parties provide, the agent will disburse the funds according to the settlement statement, record all relevant documents at the county courthouse and release all other documents. Some areas of Ohio use the round table closing format. In a round table closing, the parties sit down together to sign documents and exchange funds. Funds are delivered to the seller at the end of the closing and purchase documents are recorded and released after the funds have been disbursed. Local custom usually determines the closing format.

Whether you are involved in an escrow closing or a round table closing, all parties should ask to see the settlement statement, proposed deed, title commitment, and all other closing documents before closing.

You should take extreme care when closing a real estate sale. At the closing session, be sure all papers are checked to make sure that the intent of the parties has been carried out.

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