6 Things Your Purchase And Sale Agreement Should Have
by Homepie | Published February 8, 2022 | 5 Minutes
Purchase And Sale Agreement – Things You Need To Know
Real estate can be a complex and daunting process for anyone, especially for homeowners looking to sell without a real estate agent. The process has so many fine details, cracks, and crevices that need to be filled before you can sell your house and move into your new dream home. The entire experience is riddled with things like making an offer and getting the contract done right.
When you make or consider a formal offer for your home, you’ll have to read and fill out lots of paperwork that defines the terms and conditions of an offer. Aside from the mundane boilerplate legal language, the purchase and sale agreements contain some important terms that need to be included.
Luckily, Homepie.com has developed a detailed and informative guide that walks you through the process of putting together your contracts!
At first glance, the purchase agreement for a property may overwhelm you.
That’s okay! It’s a lengthy document that contains many familiar and unfamiliar terms. It is important that you comprehend all these concepts before you sign. If you are ready to draft your purchase and sale agreement, make sure that these six things are included.
1. Identify Parties And Property
Your purchase agreement needs to include details of the property being sold. This means identifying the correct address and the property’s legal description as mentioned in official records by your local jurisdiction. Moreover, the identity of the seller(s) and the buyer(s) must be included. So be sure to read, read, and read again.
2. Money Deposit
If a buyer makes an earnest offer, a measure of sincere gesture is demonstrated by depositing some amount of money. This is known as the earnest money deposit or the good faith deposit. The money is placed in an escrow until closing. The amount of this earnest money deposit needs to be specified in your Purchase and Sale Agreement.
3. Inclusion And Exclusion Of Items In Sale
It’s important to understand that when selling your property, the land, structures, and fixtures connected to structures are commonly included in the property’s sale. If an object or item is permanently attached to the property, the fixture is assumed by buyers as being included in the sale. Unless, of course, it is identified as being excluded from your purchase and sale agreement. There are some common items that may be included in a sale that may or may not be permanently attached, and in that case, they need to specifically be written into the contract as included. These items include things like the oven/stove, microwave, refrigerator, the washer or dryer, shelving, or perhaps a kitchen island that appears permanently attached, but is actually on wheels.
4. Have Your Contingencies
Sellers and buyers can choose to make the sale of a property contingent upon specific requirements that need to be met. That is why it is critical to have these detailed requirements outlined in your purchase agreement’s contingency clauses. Some important contingencies that need to be included are [1]:
a) Financing – it protects the buyers from a mortgage financing process. If the buyer is unable to come up with the required funding for the purchase, they can simply back out of the process.
b) Inspection – The success of the purchase agreement depends on the buyer’s satisfaction. Hence, a thorough home inspection needs to be completed by a third party that is chosen by the buyer.
c) Title – With this contingency, buyers are assured that the seller actually owns the home. It also ensures that the buyer will receive the property’s title deed upon closing of the deal. Therefore, it’s important for the purchase agreement to include a title report as a contingency before the closing of the deal.
d) Appraisal – If the purchase of the property is being financed by a mortgage, then the lender needs an appraisal. If the property’s appraised value is less than the purchase price, it is the buyer’s responsibility to make up the difference or go through the process of negotiations to lower the price.
5. Read The Fine Print – Disclosures
Legally, a seller is obliged to disclose all known material facts pertaining to the property. The requirements are different for each state but you will find mandated disclosures nonetheless. Here are common disclosures that need to be placed in the sale and purchase agreement [2]:
a) Disclosure of any knowledge of methamphetamine production on the property.
b) It is mandatory for properties built before 1978 to disclose lead hazards. The agreement needs to have a lead paint addendum that provides all details regarding any lead-based paint.
c) It is common for some states to require the disclosure of locations and status of any wells. Known wells need to be identified on a map and the seller is required to show if it is used or sealed.
6. Pricing Terms
A purchase and sale agreement needs to include the price accepted by the seller and the method of payment chosen by the buyer. Common methods that can be included in the agreement are:
a) Paying full in cash.
b) Cash down payment with a new mortgage loan.
c) The use of an existing mortgage.
Expert Guides For Purchase And Sale Agreements
Homepie.com is your free marketplace for homes. The entire purchase and sale process is simplified with all-inclusive real estate transaction software. From the very beginning stages of preparing your home, to listing it for sale, all the way through the inspecting process, and finally closing, Homepie will be a guiding light for you. Now, you’ll have time to manage important things, like packing and moving into your new home, and you’ll save a bundle of cash in commission fees.
If you’re looking for some help with your purchase and sale agreement, Homepie.com has you covered. The offer negotiation process could not be any simpler than it is when using the Homepie platform, and we generate a bonafide purchase agreement for you automatically.
Once you have your purchase agreement all set, Homepie can help you through the process with Transaction Coordination where we will ensure all the proper legal disclosures and other paperwork is completed, just like you’d have if you used a professional real estate agent.
References
[1] https://bflawoffice.com/blog/5-things-every-real-estate-purchase-agreement/
[2] https://www.legalnature.com/guides/the-key-elements-of-a-real-estate-purchase-agreement
