Real Estate Purchase Agreement Template
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A real estate purchase and sale agreement is a contractual commitment that bridges the buyer and seller, focusing on the transfer of a home or other property. Initiated by an offer from the buyer and subject to the seller's agreement, this accord serves as a vital route toward the final ownership exchange.
Writing these contracts can have serious legal implications. Therefore, it's always best to use the real estate purchase agreement template and consult a real estate attorney when drafting an agreement.
When to Use a Real Estate Purchase Agreement
A real estate purchase agreement becomes necessary whenever property ownership is transferred from one party to another. This typically transpires in instances of buying a new home, selling an existing property, or even trading properties. It could also be in scenarios where there is an intention to expedite real estate transactions, such as in property investments. The simple real estate purchase agreement serves as a legal affirmation that the terms of the transaction have been met.
Who Needs a Real Estate Purchase Agreement?
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Purchaser — This refers to the individual or entity acquiring the property. The purchaser's primary role in the real estate buy sell agreement is to offer a price accepted by the seller, thus securing a legal claim to the property. After the necessary financial provisions and completion of due diligence, the purchaser pays the agreed amount. They become legally obligated to the terms of the real estate purchase agreement form once it has been signed, ultimately leading to the transfer of property title into their name.
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Vendor — This is the individual or entity selling the property. In a real estate sales agreement, the vendor provides property details, accepts the buyer's offer, and signs necessary documents to complete the transaction. Once paid according to the agreed terms, the vendor transfers the title, ending their role in the agreement. They furnish a deed or equivalent document, recording the transaction within the pertinent local authorities.
Key Terms
- Purchase price: This refers to the total amount the buyer agrees to pay for the property. This amount is usually determined through negotiation between the buyer and the seller.
- Closing date: The closing date is when the property is officially transferred from the seller to the buyer. It's also often the date when the seller receives the purchase money, and the buyer receives the property deed.
- Contingencies: These are specific conditions or actions that must be met for the real estate purchase contract to move forward. Typical contingencies include inspection, financing, and appraisal.
- Earnest money: This is a deposit made by the buyer to show the seller that they are serious about purchasing the property. It is typically held in an escrow account until the closing.
- Property description: This detailed section of the simple real estate purchase agreement form outlines the specific characteristics of the property being sold, including its location, size, design, and any essential features.
How to Write My Own Purchase Agreement
Writing a contract for selling real estate can be a complex task. However, with the help of a real estate contract template, it can be successfully completed. Here's a step-by-step guide on how to write an agreement:
Identify the parties:
Begin by clearly identifying both the buyer(s) and the seller(s) by their legal names. This section should also include their respective addresses.Property description:
Detail the property being purchased. This should include the full address, the legal description of the property (which can be found on the deed), and any included or excluded items (e.g., appliances, furniture). For reference, consider looking at a simple property sale agreement sample.Purchase price and terms:
State the purchase price and how it will be paid. This could be a cash sale, a mortgage, or another type of financing. If an earnest money deposit will be held in escrow, detail those terms here as well. You may find associated terminologies in a sample real estate contract.Closing and possession details:
Specify when and where the closing will take place and when the buyer will be able to take possession of the property.Contingencies:
Outline any conditions that must be satisfied before the sale can close in the contract to sell real estate. This may include passing an inspection, the buyer securing financing, or the sale of the buyer's current home.Disclosures and inspections:
Detail any required disclosures about the property’s condition and any inspections that will be performed prior to closing. A simple real estate purchase agreement PDF might serve as a useful guide for what such disclosures might look like.Signatures:
At the end of the agreement, the buyer and seller should sign and date the contract. It’s recommended that the signatures be witnessed or notarized for legitimacy.
Navigating the intricacies of crafting a real estate purchase and sale agreement whilst minimizing expensive legal fees by utilizing a well-structured real estate purchase agreement template can be incredibly advantageous. The template guides you effortlessly through the process, ensuring you include every crucial detail, resulting in an accurate and legally robust document. Also, a simple real estate purchase agreement — PDF format file — not only saves you potential stress and time but also financial resources, providing an intelligent option for the savvy property purchaser.
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Frequently Asked Questions
The parties to a purchase agreement for the sale of residential property legally must uphold the commitments listed in the contract once they sign it and it is in escrow. Sellers who want to back out of the agreement may do so in one of the following ways:
During the Review of the Contract
Often, after signing a contract, it will go through a five day review so that attorneys can check it for accuracy. The seller can terminate the agreement at any time during this process.
Addendum to Back Out
The seller may withdraw from the contract at any time during the contract if the purchase agreement includes an addendum that permits this. This addendum will rarely be included in a purchase agreement.
Contract Breach
Each party typically records certain contingencies in the sales document that allow termination if they are not met before closing.
Send a Buyer Request
Contact the purchasing party and explain the reasons why you want to terminate the agreement if all else fails. It’s possible that a buyer will sympathize with your situation and void the contract. Ask if need be.
The seller can face legal consequences and be held liable for compensation if they can’t lawfully withdraw from the contract and refuse to continue with the sale.
It’s possible to terminate a purchase agreement. You give the seller an earnest money deposit when you sign a purchase agreement for real estate, and you are legally bound to the terms of the contract. The earnest money shows the seller that you intend to follow through and purchase the house. In most cases, however, contingencies allow you to back out of a legally accepted offer while still getting your earnest money back.
Taking a home off the market if a buyer isn’t committed is not fair to the seller. An escrow account will hold the earnest money details, which will help to cover some of the buyer’s closing costs at settlement.
The severity of the consequences, however, depends on the contingencies in your proposal describing when backing out without penalty is acceptable.
Before signing the purchase agreement, it is easier to back out of buying a house outside of home sale contingency periods. You’ll be in much more trouble if you leave after that point or after the financing contingency periods have expired.
Home purchase agreements in some states include a clause requiring both parties to agree to mediation if there is a dispute. With the help of a mediator, you can directly discuss the issue with the seller and, hopefully, resolve it without the need for a courtroom trial.
The buyer. As stated in the contract, a purchase agreement for the house is legally binding. Buyers should be allowed to back out of a purchase agreement for acceptable reasons. If you break the contract once it’s signed, you could lose your earnest money deposit.
There are several reasons why a seller can back out of a contract, including problems arising from contingencies in the contract.
Once you have accepted an offer to purchase, you will have a period of between 10 and 14 days during which you must sign a purchase & sale agreement. As soon as the home inspection and any supplemental inspections are complete, the purchase & sale agreement can be negotiated. At this point in the sale process, your attorney will be an invaluable resource. You may want to negotiate the price down if the home inspection reveals moderate to major work that needs to be done.