What To Include In A Real Estate Purchase Agreement

What To Include In A Real Estate Purchase Agreement

by Gloria

A real estate purchase agreement is a vital written document required in the purchase and/or sale of a property. It is also referred to as a real estate contract involving two parties" the buyer and the seller. In the U.S., these agreements are required by law to be in writing to be considered legally binding. real estate agent
The document contains several important details such as the legal description of the property including the address, the purchase price, earnest money or deposit, inspections done, information on buyer financing and the timeframe for the buyer to obtain financing, closing date and time as well as the appliances and fixtures included and excluded in the sale of the property concerned. real estate agent

Parties involved" A real estate purchase agreement must identify the names of the seller and buyer who are also called principals. Only persons in a stable mental condition can enter into a contract. real estate agent

Property information" A legal description of the property must be stipulated in the contract including the specific address. real estate agent

Purchase price" This refers to the amount of the property’s selling price or an estimated value in the event an appraisal is still forthcoming. real estate agent

Signatures" The seller and the buyer should affix their signature on the contract to make the document enforceable. real estate agent

Contingencies" Most purchase agreements include contingencies of various kinds to protect the parties involved. real estate agent

a. Mortgage" This is one of the most common contingency which normally requires the buyer to secure a loan within a specific time after the contract signing. b. Inspection" Most buyers want to make sure that the property they are purchasing is free from material defects this is the reason why they require a satisfactory inspection. c. Appraisal" It is to the advantage of the buyer if the seller provides an appraisal report on the property during negotiation. However, the buyer also has a right to ask for his or her own appraisal to make sure that what he or she is buying is within a fair market value and not overpriced. d. Another sale" This means that the purchase or sale of a property is contingent on the sale of another real estate property. It is a reality that some buyers negotiate on purchasing a new home while their own property is still in the selling stage as well. It is only when their home is successfully sold that they can finance the purchase of a new property. e. 72-hour timeframe" This is usually a contingency provided by the seller in which he or she accepts a contract on condition that the potential buyer looks for a buyer or renter of their own property to purchase the new home. The seller here gives a 72-hour notice to buyer to scrap their contingency and continues to hold the right to sell the property. If the buyer can prove that he or she can purchase the property, the contingency will be removed. If not, the buyer will release the seller from the contract and allow him or her to accommodate a new contract. real estate agent

Closing" This is the date and time of closing when ownership of the property is transferred from the seller to the buyer. A different date may be stated for physical possession of the property. The closing also specifies which party will shoulder the closing costs. real estate agent

Fixtures" This refers to the appliances, furnitures and fixtures that the seller wants to include or exclude in the sale of the property. real estate agent

These forms can be purchased and downloaded over the internet. It is always recommended that you have an attorney look over any important document before signing. real estate agent