Real Estate Practices in Baton Rouge

As real estate practices vary considerably from state to state, we have prepared this summary for use by out-of-state buyers. The material is divided into three main areas:

I. The Purchase Agreement

II. The Mortgage

III. The Closing

I. The Purchase Agreement (Contract)

A. PREPARATION: Preparation of the Purchase Agreement by a Realtor is customary, rarely is an attorney retained. The interim form of offer, sometimes used in other states, is not used in Louisiana. The Purchase Agreement, when fully executed, creates a binding contract.

B. THE DEPOSIT: The deposit is customarily 1% of the purchase price given in the form of a check, made payable to the listing broker. In most cases it is held by the listing broker until consummation of the sale. Deposits are returned if contingencies of the contract cannot be met, following execution of a cancellation of the agreement.

C. CONTINGENCIES:

1. FINANCE CONTINGENCIES: Finance contingencies are widely used. The purchaser obligates himself to make good faith loan application, and if a financing commitment cannot be obtained within the specified time, the contract is declared void and the deposit is returned.

2. INSPECTIONS: The Purchase Agreement may be contingent upon the satisfactory completion of roofing, termite, structural, and component inspections. These inspections are normally paid for by the purchaser. A termite certificate will be provided by the seller at closing.

3. SALE OF OTHER PROPERTY: Occasionally an offer to purchase may be contingent upon the sale of other property. This type of contingency is usually accepted with the understanding that the subject property is to remain on the market, and that if another acceptable offer is made on the property, the first purchasers will have 24 – 48 hours in which to remove the contingency.

D. PERSONAL PROPERTY: It is customary to reference in the Purchase Agreement any personal property that the purchaser expects to be included in the sale, i.e., window treatments, rods, storage sheds, swings, basketball goals, etc.

E. TAXES AND RENTALS: Taxes and rentals are referenced in the Purchase Agreement, they are prorated to the date of the Act of Sale.

F. TITLE: The title must be clear. Any existing liens and encumbrances are to be removed by seller prior to closing.

G. TIME TO CLOSING: Thirty to sixty days is the average time period allowed for closing, depending upon the lender chosen.

H. OCCUPANCY: Occupancy usually coincides with closing. Occupancy agreements are entered into when occupancy must take place for any period prior to or after closing.

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