Last month, the Utah Association of Realtors released the new real estate purchase contract for Utah. This document is exactly as it sounds. It is the contract used when you want to put in an offer to buy a home.
There have been some major improvements to the document and I thought it might be informative to talk about them here – mainly how some of these improvements protect you more, as the potential buyer of some Utah real estate.
Don’t worry sellers, we will explore you next!
If you are a Utah home buyer:
1. The contract now automatically includes any water rights for the property.
This may seem like a small one, but if you have ever tried to get Utah water rights you didn’t have, you’ll know how valuable these Utah water rights are. They can be very costly to get, sometimes impossible. Each Utah city only gives out a certain number of them, and when they’re purchased and gone, they’re gone!
2. The contract now says that prorations of your Utah taxes, mortgage interest, property association dues, and other costs are now to be prorated as of the settlement deadline.
So when you go into the title company and sign the documents, that’s when you start paying. Not before, not after.
3. Special assessments having to do with the homeowner’s assocation are now pre-specified as to who will pay for them.
This is a HUGE DEAL. If you buy a condo, or even a home in a planned urban development (PUD), half the time, the association has levied an additional charge on all of the residents for capital improvements such as a new roof or new landscaping, whatever it may be. Many times, you as the buyer, don’t know about this until 3/4 of the way through the transaction. You can now specify who will pay this assessment at closing if one is found so there are no surprises. Wow!
4. You now automatically get a copy of all association minutes, budgets, and financial statements.
If the homeowner’s association is broke, you may want to reconsider your purchase, or be forewarned of a pending special assessment to help.
5. Additional earnest money deposits can now be put down halfway through the transaction.
How does this affect you? Well, if Mr. Seller decides to give you the heave ho and not sell you the property, whatever earnest money amount you put down is the amount you can accept from the seller as liquidated damages. So, the more you put down, the more secure the overall transaction is going to be. The great news is you can now break this up. Put some down at the beginning and put some more down after you’ve done your due diligence and assured yourself you’re not buying a pile of you know what.
So, let’s review five things that have changed in the Utah real estate purchase contract to help you as a soon-to-be owner of Utah real estate.
1. You now automatically get water rights.
2. You don’t pay for the house until you sign for the house.
3. You decide up front who pays for any special assessments owed to the homeowner’s association.
4. You are now automatically owed a copy of all homeowner’s association minutes, budgets, and financial statements.
5. Additional earnest money deposits can now be put down two different times during a transaction.
There are other minor changes that I will always point out during a transaction. Don’t forget to read the seller’s changes as well. Everyone will want to know!
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