In a real estate purchase agreement, also known as a purchase and sale agreement, all the crucial details of a deal between a buyer and a seller of real estate are spelled out. Everything you need to draught a solid agreement that is adapted to the needs of the parties are included in our real estate purchase agreement. In addition to the typical clauses included in most real estate purchase contracts, this agreement gives you the option to alter the following clauses:
- The kind of buyer or seller, such as a sole proprietor, married couple, corporation, or trust
- The cost of the acquisition and the earnest money deposit
- The buyer’s conditions for the deal to go through, such as the type of financing (third-party lending, seller financing, loan assumption, all-cash deal, or another financing), whether an appraisal is necessary, whether an inspection is necessary, and whether this deal is dependent on the sale of the buyer’s home or another piece of property.
- What if any repairs are necessary before shutting
- What fixtures on the property the seller will remove before closing and what personal goods the seller agrees to leave behind
- whether or if any leases for tenants that may be present on the property will be assumed by the buyer
Buyer Contingencies
The buyer’s contingencies are particular circumstances that must take place before the buyer will consent to the transaction’s closure. The buyer will have the right to terminate the contract and obtain a refund of any deposits made, including earnest money, if a condition is not met.
However, if a contingency turns out to be unnecessary later, the buyer can always choose to waive it. The contingency alternatives offered with this agreement are all very conventional, even though each event can be discussed and agreed upon by the parties. Financing, appraisal, inspection, and property sale contingencies are among the available alternatives for contingencies; each is described below.
You can choose whether the buyer will obtain financing for the property through a third-party lender, a mortgage assumption, seller financing, an all-cash transaction, or another form for the finance contingency. According to this condition, the buyer must first get adequate finance before closing. As a result, the buyer will have the opportunity to cancel the transaction and get a refund of the earnest money and any additional deposits if they are unable to secure the required cash.
A typical lending institution is referred to as a “third-party lender” in this context. By agreeing to pay off the outstanding debts on the property, the buyer will “mortgage assume” the seller’s loan obligations. “Seller financing” refers to a private lending arrangement that the buyer and seller will make. “All cash” indicates that the buyer will finance the deal outright, without borrowing money. It should be noted that electronic wire transfers are typically accepted, thus the money does not necessarily need to be in the form of currency. To explain a different kind of finance, choose “Other.”
According to the appraisal contingency, the property must be valued at a price that is at least as high as the acquisition price. The buyer will have the choice of either terminating the contract and obtaining a refund of the earnest money or renegotiating the purchase price if the appraisal comes in below the agreed-upon amount. The agreement stipulates that the evaluation must be completed within 10 business days of signing. You can choose which party is responsible for paying for and obtaining the evaluation.
The inspection contingency stipulates that a professional inspection of the property is required prior to closing. The buyer will have the option to either terminate the contract and obtain a refund of the earnest money or force the seller to fix the problem if the inspection isn’t done by that point or if it is done but discovers the presence of a significant flaw. The inspection must be completed according to the terms of the agreement within 10 business days after signing it.
The final choice for a contingency stipulates that the buyer sell its house or another piece of property before closing. The buyer has the option to withdraw from the contract and obtain a return of the earnest money if the sale of their home doesn’t go through.
Required Repairs
If the property needs any repairs, that is another crucial detail you must provide. This covers everything on the property that is in need of repair or has structural or mechanical issues, such as issues with the foundation, walls, roof, water and electricity systems, plumbing, or mechanical systems. The Seller will be forced to fix these items unless the Buyer agrees otherwise. However, as always, the buyer has the option to forgo the seller’s obligation to undertake the repairs.
Executing the Agreement
The parties need just sign and date the document in the presence of a notary public or two witnesses in order to implement the agreement. In most states, a single notary is sufficient to serve as a witness. However, in Connecticut, Florida, Louisiana, and South Carolina, mortgage agreements must always be signed in the presence of two witnesses. Additionally, a notary public may sign in lieu of one of the witnesses in these states.
