How to make real estate contract binding

Q. This is written in response to your recent letter asking how to make a purchase contract “more binding.” One simple method is to require more deposit money at the time of acceptance. This money would be tied up and not so easy to walk away from if the buyer does not close. Just make the deposit nonrefundable. Simply state that if the property does not close, the seller keeps the money.

While I do not sell real estate for a living, I do handle inventory for a land financing company. Often when we get property back it is agricultural acreage, or large timber tracts. More often than not there is some form of a “performance” clause in the sale contract. I once sold a property with a weekly increase in cost if the buyer was not ready to close on the agreed upon date. Guess who wanted to close a week early? And we did.

A. I suppose a home seller might ask for the provisions you mention, but I don’t see many residential buyers going for it. In some locations, it’s customary for a purchase contract to become binding only after approval by attorneys for both parties, and I suspect a buyer’s attorney might balk at that nonrefundable provision, even if the buyer hadn’t. And a first-time homebuyer looking for an FHA, VA or USDA mortgage may not have a large amount of cash to put down as a deposit.

What you mention sounds like negotiating chips in contracts for commercial or industrial properties. I see no way it would work for the average single-family house. Most residential contracts provide that the earnest money deposit will be returned if the buyers can’t obtain the financing they need, if they are not satisfied with the report from their home inspector, or — with FHA and VA mortgages — if the lender’s appraiser doesn’t find the property is worth the proposed sale price.

Q. If a property is being sold and the buyer wants said property to be surveyed, who is responsible to pay for the surveying? The buyer or seller?

A. That’s dictated by whatever they agreed to when they signed the sales contract. Local custom usually prevails, and in most areas a survey is considered the seller’s expense as part of the responsibility to prove clear title. That’s not a legal requirement, though, and like many matters, before the contract is signed, it’s negotiable.

Q. Twenty years ago, my father placed his house in his children’s names. Since then, one sibling passed on. This leaves my younger sister and me. A few years ago, she and her husband declared bankruptcy. They lost their home and are living with their son.

I am a full-time caregiver for my mother, who has macular degeneration and severe dementia. She is failing fast and I find myself doing more and more. My sister owes me for two years of back house taxes, and she has not made any type of sacrifice to help me. Because of that, I cannot afford any homeowners insurance on my own home.

Is there anything I can do to make her pay these taxes or to have her name removed from that house? I have invested $3,000 in landscaping and am currently painting the house, the garage and a shed. She hasn’t contributed one cent. Any advice, help or suggestions, would be much appreciated.

A. I don’t think there’d be much point in talking to a lawyer. If your sister is bankrupt, what’s the use? The saying that comes to mind is, “You can’t get blood out of a stone.” Just keep track of what you’ve spent on her share of the taxes. Insist on getting that back some day when the house is sold and the proceeds divided.

There’s quite a bit you don’t tell me. Is your father still living? Is your mother still in the house? Have your folks been living there tax-free for 20 years? What is their financial situation? Why haven’t they contributed to the upkeep of that house? Often, when parents put the house in their kids’ names, they continue to pay expenses, perhaps in the form of rent or gifts. I don’t know enough about what’s going on to say for sure, but your parent(s) may be a better place to look for help.

And you absolutely must keep up homeowners insurance. It can’t cost much more than a few hundred dollars a year. Cancel cable TV, give up eating out, do whatever you must, but reinstate your property insurance right now.

Ÿ Edith Lank will respond to questions sent to her at 240 Hemingway Drive, Rochester, N.Y. 14620 (include a stamped return envelope), or readers may email her through askedith.com.

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