Beware of these deal killers

The typical real estate sales contract includes not just a price and a closing date but also a number of clauses, any of which can trip up the buyer or seller and scuttle the deal.

While contract language may vary from one place to another — not just state to state but also county to county, and sometimes even from one company to another — here’s a quick rundown of some clauses or conditions that are likely to cause the most trouble:

Financing. Perhaps the most common contract condition makes the transaction contingent on the buyer obtaining a mortgage or a written commitment in the amount required to complete the purchase within a certain time frame.

Each part of this clause is important, obviously. But according to real estate professionals, the timing aspect can be the most troublesome. The sooner the buyer can complete this condition, the better. If the deadline passes without a loan approval, the seller has the right to cancel the contract.

“Since financing contingencies can be complex and vary widely, they require strict attention to all timelines involved,” advises Sam DeBord of Coldwell Banker Danforth in Seattle.

But buyers beware of using this clause to get out of the deal. You could find yourself in default if you fail to follow through on what you agreed to.

In Virginia, making a substantive change — seeking a loan that far exceeds the amount specified in the contract, for example, or being unable to find a rate that’s lower than what’s stated in the contract — may put your earnest money deposit in danger. In Minnesota, if your financing falls through after you have satisfied the financing contingency, the seller can keep all the earnest money as damages.

On the other hand, Florida contracts are “very one-sided” in favor of buyers, reports Liane Jamason of Smith & Associates in Tampa. Twice recently, Jamason had to deal with upset sellers who mistakenly thought they were entitled to their buyers’ deposits when their financing fell apart after months of waiting to close.

Closing costs. A poorly worded clause here can cost the buyer or seller a lot of money, depending on how it’s written.

Often, the agent writes in the contract that the seller will pay X amount toward the buyer’s closing costs at settlement, when what the buyer really wants is that X amount be paid toward closing costs, points, prepaid items, lender-allowed costs, warranties, administrative costs and fees.

“Closing costs are really only those associated with closing the transaction and may be far less than the entire list of financing charges,” explains Jim Mellen of Re/Max Peninsula in Williamsburg, Va. “A buyer who shows up at the table planning to have $6,000 paid on his behalf will be awfully angry if he gets only $1,200 of his fees paid.”

Another possible issue is how the closing cost contribution is stipulated. If it is given as a portion of the selling price, say $300,000, a 3 percent contribution could cost the seller $9,000. But if it is written as a part of the financed amount, say $240,000, the seller would be on the hook for just $7,200.

Make a mistake, and there are no do-overs. “The written word on a contract will trump intentions all day long,” Mellen says.

Disclosures. The different property disclosure clauses are “some of the more difficult to navigate,” says Ralph Harbison of Re/Max Realty Brokers in Birmingham, Ala. Buyers tend to want “yes” or “no” disclosures, but sellers prefer something that says they are not aware of any issues. And that leaves buyers to wonder what’s wrong with the place.

Writing certain inspection clauses — termite, radon, mold, lead-based paint, home — into the contract should go a long way toward removing the buyer’s anxiety, but only if the buyer adheres to the contract’s timelines.

In Florida, for example, the buyer typically has 10 days in which to obtain and review a home inspection. The buyer can cancel the contract during this period by providing a written notice to the seller, or he can ask for an extension. But issues arise when the buyer tries to negotiate repair credits or actual repairs and the inspection period expires.

“If the repair issues cannot be resolved during the initial inspection period, the buyer must execute the cancellation or extension,” says Blair Damson of Coldwell Banker in Coral Springs, Fla.

In the Philadelphia area, as long as the buyer adheres to the time limit, he only has to notify the seller that he does not wish to proceed to get back his earnest money deposit. But Linda Williams, an attorney/agent with Sage Realty in Wayne, Pa., goes a step further by making sure the deposit is not payable to the seller until after the inspection period ends.

In Warren County, N.Y., broker Mark Bergman, president-elect of the local multiple listing service, writes inspection clauses with specific repair cost limitation “to prevent frivolous renegotiation.”

Dates. One more thing about timelines: Be explicit. Contract language should be spelled out in either calendar days or banking days, says Magda Robles of Keller Williams Properties in Weston, Fla. “Number of days is not good enough,” she says. “Specify the specific month, day and year.

“As is.” This clause can be a double-edged sword, says David Welch, a broker in Orlando, Fla. While the seller is not obligated to make any repairs found necessary during an independent home inspection under the as-is clause, the buyer can cancel for any reason if he does not like what the exam has revealed.

Short sales. Buyers need to be leery when a “seller” in a short sale commits to paying closing costs. The bank is the seller, not the occupant, warns Christy Walker of Re/Max Signature in Phoenix. As such, the bank has every right to renegotiate the fees or refuse to pay them at all.

Geneva Mayor Kevin Burns took some heat in February when it was revealed that he had used his city email account to reply to messages about his campaign for the Republican nomination for Kane County Board chairman. The city council declined to pursue disciplinary action against Burns. The emails contained frank exchanges about Burns’ opinions of his opponent and of others, including Congressman Randy Hultgren, who endorsed Chris Lauzen after Burns announced he had Hultgren’s support.

When it came to county politics, Kane County voters elected a new county board chairman, auditor, coroner, circuit clerk and eight new county board members in November. The turnover ushered in a new administration headed by Illinois State Sen. Chris Lauzen. Lauzen pledged a flat tax levy and an end to even the perception of pay-to-play and political cronyism in the county.

After more than a year of debate, the Kane County Board approved revisions to the ethics policy that governs their behavior. But two Kane County State’s Attorneys have ruled large portions of the code unenforceable, possibly inviting a lawsuit.

In McHenry County, voters overwhelmingly defeated in November a ballot measure — championed by state Rep. Jack Franks, a Marengo Democrat — that sought to create an executive form of county government.

Under the executive form of government, the county executive runs the day-to-day operations of the county including the hiring and firing of employees and will also have the power to veto county board decisions.

The county executive, supporters said, would add transparency and accountability to county government, and allow for a stronger county board that would be focused solely on legislative matters

But opponents of the change said the county executive form of government would give the county executive too much power.

Cities, townships and counties across the country had questions on their respective ballots asking voters whether they thought the United States constitution should be amended to keep big money out of politics. A group of Kane County residents, loosely connected to the national Move to Amend group, turned in 14,386 signatures, far surpassing the 12,000 necessary to put a question on the county’s ballot. The group may have turned in more signatures than for any other ballot initiative in Kane County history, according to Chief Deputy Clerk Stan Bond.

Allana Potash

The chase is on to amuse accelerating apple appeal for potash, and in this Olympic year Allana Potash is in gold badge position as its Dallol Activity in the Danakhil arena of Ethiopia has the finishing band in sight.

Potash is a all-encompassing name for a array of potassium salts, the a lot of accepted getting potassium chloride (KCl), aswell accepted as muriate of potash (MOP) and sulphate of potash (K2SO4) or SOP. Around 95 percent of all-around assembly is acclimated in fertiliser to advance baptize retention, yield, comestible amount and ache attrition of aliment crops such as bake-apple and vegetables, rice, wheat, sugar, corn, soybeans, approach oil and cotton.

The world’s better ambassador of potash, by some distance, is Canada, with the better consumers getting China, the United States, Brazil and India. So why is a Canadian analysis aggregation putting all its assets into developing a potash operation in Ethiopia?

There are abounding answers to that question, and they all amalgamate to put Allana Potash in a actual able position to accumulation the growing fertiliser markets in China and India—with Ethiopia’s area on the horn of Africa getting around next door, compared to Canada or Russia.

First of all, there is an affluence of potash in Ethiopia, area it was aboriginal mined in the fourteenth century. “We anchored some actual absorbing assignment after-effects from a aggregation alleged Parsons and Co, an analysis aggregation that was operating in Ethiopia in the 1960s,” said Richard Kelertas, chief carnality president, accumulated development. “They had done able-bodied over a hundred assignment holes in the abasement area we are operating and the after-effects looked acutely promising.”

Until about recently, he explained, the arch adjustment of mining for potash was abysmal shaft, which was not decidedly acceptable in this arena of Ethiopia which is accountable to actual hot temperatures, so the acreage had been abandoned. The Dallol Project, however, is absolute for band-aid mining, a adjustment which pumps alkali into assignment holes to deliquesce the potash, afresh pumps the consistent band-aid to the apparent area it is transferred to dehydration ponds to dry afore final processing to abolish the salt. With the potash deposits getting about bank and a hot altitude that allows for accustomed solar evaporation, Allana allowances from basal basic amount and low operational costs into the bargain.

Another benefit is that at a time if some governments accept been abandoning promises they fabricated to mining operators, the Ethiopian government has been acutely helpful. “When we aboriginal looked at it three or four years ago, the basement larboard a lot to be desired,” said Kelertas. “But we had assurances from the Ethiopian government that they were traveling to advancement the alley system, and they came through on that. All things considered, low cost, low cap-ex, low op-ex, and the actuality that the ability was absolutely abundant and bank led us to go advanced with analysis plan a brace of years ago. A lot of of our conduct has been in the western areas on the alkali plain,” he continued, “and there’s abundant there for a actor bags a year for thirty or forty years.”

The advantages of the altitude are absolutely significant. “This is one of the hottest places in the world,” said Kelertas, “but that helps us accumulate our op-ex costs actual low. We do not accept to body big-ticket evaporators as you do in acknowledgment locations of the world. We’re application solar dehydration ponds, area the activity from the sun evaporates the potash brine. There are some implications to operating in a hot altitude but the advantages far outweigh the disadvantages.”

The project’s arid area has added advantages, too, from an ecology point of view. There’s no flora and fauna and there isonly a baby aboriginal population, which is actively affianced in the development.

Concerns about sustainability in potash mining are just the aforementioned as they are in any mining operation, said Kelertas, abnormally if accessible pit or abysmal shaft mines are involved, but here’s area band-aid mining array again. “With a band-aid mine, the ecology brand is about nil. It’s alone the bulb facility, the pumping, whatever activity you’re traveling to use, the assignment sites, the able-bodied sites and the piping. Added than that there’s no blasting work, and no emissions to allege of.

Allana employs a lot of Ethiopians in its analysis and development operations so a baby apple has sprung up abutting to the site, area acting housing, a school, and a medical dispensary accept been built. “Once we alpha architecture that apple is traveling to get a lot bigger, so we’ll be alive carefully with the bounded authorities, with the apple elders and association leaders to accomplish abiding that all the bounded community are followed,” said Kelertas. “We’ve done a acceptable job on that from the alpha and we accept a abundant accord with all levels of government, so there haven’t been any issues.”

The alone ecology affair that could crave added plan is in agreement of baptize usage, he added, and plan is getting done on that now. Baptize can be a advancing affair in awful busy areas – like for instance in Saskatchewan, Canada, but the Danakhil arena has affluence of baptize and no added end users aggressive for it. “There’s no agronomics anywhere abreast us, and no animal settlements afar from our village,” said Kelertas. “We’re accomplishing a lot of hydrological plan to acquisition out absolutely area the baptize is and how abundant we’re traveling to need, but we don’t see any issues.”

Allana, with adviser BNP Paribas, has already put calm over $600 actor in bendable commitments for debt costs from a accumulation of development costs institutions and consign acclaim agencies. The abounding bankable achievability abstraction getting undertaken by German analysis consulting aggregation ERCOSPLAN will be accomplished by the end of this year, and already that has been analysed the allotment will be firmed up. Kelertas aswell expects to accept a brace of offtake agreements active up by then, too, and Allana’s two ballast partners, Liberty Minerals & Mining and The International Finance Corp (IFC – a accessory of the Apple Bank) will aswell affirm their pro rata allotment of debt and disinterestedness financing, so architecture of the abundance could alpha in the aboriginal bisected of 2013.

The absolute activity amount with all contingencies (15-20% contingencies are included) is about $800 million. There is no charge for gigantic evaporators, but huge solar dehydration ponds accept to be built. “We’ve already put up six pilot ponds and we’re accomplishing the dehydration amount testing appropriate now,” said Kelertas. “Really all you charge is a processor, and conveyors to yield the raw crystals from the abbreviating ponds over to the separators.” The better allocation of the $800 actor is for assembly ($664.4 million) which itself is bedeviled by the alkali processing bulb at $188 million.

Also included in the amount bump is $90 actor for a new anchorage ability in Djibouti. Ethiopia is a land-locked country, but its neighbour Djibouti already has a anchorage ability and affairs are in abode for a new anchorage to be complete at Tadjoura. “The Arab Fund for Economic and Social Development and the Saudi Fund for Development accept financed the Djibouti Anchorage Authority to body the new anchorage ability in Djibouti,” said Kelertas. “This is on the arctic side, the added ancillary of the bay from the accepted website – so we don’t accept to angle that $90 actor any added but we still cover it just in case in our cap-ex total.”

Transportation to the ports will initially be by barter – a 600 km journey. “We’ll be shipment two to four ample bike bivouac units an hour (two bivouac units and a cab, with 40 metric bags in anniversary trailer),” said Kelertas. The artefact will be stored at the anchorage to be loaded either on alembic or aggregate loading ships.