A real estate purchase agreement form is a legally binding contract that binds two or more parties. The agreement binds them to the terms and conditions of the sale or purchase of a home or any other residential real estate. It is also used for the previously owned property as well as for a property whose construction will be completed before closing.
Moreover, the agreement is usually used by potential buyers and sellers of residential property. The other names of real estate purchase agreements are;
- Real Estate Contract
- Residential Real Estate Purchase Agreement
- Agreement to Purchase Real Estate
- Real Estate Sales Contract
- Home Sale Contract
- Real Estate Purchase Contract
Table of Contents
The purpose of a real estate purchase agreement:
The main purpose of having a real estate purchase agreement is to make sure both parties are protected from being exploited. This is an avenue of making sure that all expectations of the real estate transaction are satisfied before closing. It also tries to cover every foreseeable event of the transaction.
Before legal title is transferred from the property owner to the buyer, it is also essential to state the legal rights and responsibilities of the residential property buyers and sellers.
How do you write a real estate purchase agreement?
Here are the steps to write a real estate purchase agreement;
Introducing the parties
At first, the agreement should indicate the exact date that when it was created. It also determines the buyer and the seller. Also, state that the official full names and contact information like the mailing addresses of the parties.
Description of the property
To identify the specific property being conveyed, a description should be provided of the residential property. An ideal description will typically include the legal description and the personal property.
In this section, mention the basic terms of the transaction. Basic terms showcase the essential details, rights, and obligations the agreement. Usually, basic terms address the earnest money deposit, purchase price and terms, and all-cash offer.
Next, the buyer has to indicate any other means of financing the buyer will use to raise the finances. All these means of financing should be explained in detail.
Outline the contingencies that may apply to the transaction like inspection, financing, loan, appraisal, and title.
Sale of another property
The agreement should clearly clarify the property that is being sold and how many days after signing the agreement the buyer will have to finalize the sale.
Factors relevant to the closing
The terms of closing such as closing date and clarifying closing costs should be outlined.
Additional facts affecting the closing
There are other considerations like survey, title, title insurance, property condition, appraisal, the closing, governing law, offer expiration, and addendums that influence when the closing will take place.
Common disclosures that include in a residential real estate agreement are;
- Lead-based paint disclosure
- Well disclosure
- Methamphetamine disclosure
- Property disclosure statement
- Termite damage
- Subsurface sewage disposal system
- Personal interest
- Radon gas
- Adequate facilities taxes
- Potential annexation
Additional terms and conditions
In a residential real estate purchase agreement, the following additional terms and conditions can be included;
- Dispute resolution
- Option to terminate
- Closing deliverables
- Risk of loss
- Real estate taxes
- Homestead classification
Items included or excluded
Here are the items should be included as part of the property’s sale;
- Light fixtures
- Heating and cooling equipment
- Built-in kitchen appliances
- Window treatments
- Bathroom fixtures
Furthermore, any representations and warranties that are applicable to the property should be mentioned.
The agreement must be signed by the seller, buyer, and the agent.
Asset Purchase Agreement Form
Business Bill of Sale Purchase Agreement Form
Commercial Real Estate Purchase Agreement Form
Land Purchase and Sale Contract Form
Free Real Estate Purchase Agreement Form
Residential Real Estate Purchase Agreement Form
Printable Real Estate Purchase Agreement Form
Shares of Stock Purchase Agreement
In conclusion, a real estate purchase agreement form must include information regarding buyer and seller identification, a property description, purchase price, payment terms, closing terms, disclosures, and signatures of both the seller and the buyer.