A sales contract makes any transaction valid and legal. Without it, there’s a chance that prices along with other terms and conditions might not be adhered to by one of the parties involved. However with the execution of such contract, each parties are protected. Should problems occur and remain unsolved, they have the right to take legal action against the erring party.
A purchase agreement is a contract entered into by 2 parties involved in the sale of a piece of real estate property irrespective of whether it is a newly constructed structure or an old home. It’s in this document where all the details of the property and the information about the seller and buyer are stated.
For home buyers, it’s strongly recommended that you read thoroughly and understand the terms laid out in the document. These include the sale price, deposit needed, who the escrow agent is, closing costs, among many others.
The sellers, for their part, should also ensure that they include all pertinent information in the contract. It is your responsibility to provide this document to complete the sale of your property. Depending on which state you belong to, make sure that you use the right purchase agreement form. Some states have their own real estate forms while the others use the standard format.
So what specific information should you put in the sales or purchase agreement?
Location of the property. The address of the house needs to be clearly stated – the exact house number, street, district and state.
Condition of the property. A sales contract should also provide information on the physical condition of the residence, whether it’s a new or old home as well as the date it had been constructed.
Sale price. This is the price of the house that the seller and buyer have agreed to.
Deposit. This is the amount the buyer needs to provide in advance. It will form part of the total selling price and is often kept by a third party also referred to as an escrow agent.
Names of seller and buyer. The 2 parties involved need to be named in the document and they are needed to affix their signature to legitimize the transaction.
Along with the purchase agreement, the seller should also give additional disclosure forms. These are the real estate disclosure and lead paint disclosure forms. The first one provides details on the real condition of the property including physical defects and repairs done. The lead paint disclosure form is often required from owners of homes built before 1978. This is to inform the buyer of the potential hazards of lead paint that might have been used in the property.
Purchase agreements are a very important component of any real estate transaction that involves the sale of a home. If you are not familiar with this, it’d be a good idea to consult a real estate lawyer before finalizing the sale of your property.
Another great article by Elbow Park Real Estate