Facts about the Real Estate Purchase Agreement template

Contents

What is a Real Estate Purchase Agreement?

A real estate purchase agreement is a contract between a buyer and a seller that outlines each party's responsibilities before a property changes ownership. During the home buying process, a potential buyer may find a property and make an offer to the seller. If the seller accepts the offer, the buyer may use a purchase contract to secure the home and begin the process of officially owning it. The real estate purchase agreement helps the seller and buyer complete the steps to transfer the property. It covers the time period before the official closing date when the buyer may be securing a home loan, getting a property inspection, and reviewing the title.

A standard real estate purchase contract includes details about the seller and the buyer. It also names the property and includes the precise location. Details about how the purchase will be financed should also be part of a purchase agreement, such as through a mortgage or with cash. The seller may include information about the property's condition and representations and warranties. Some purchase agreements may include a contingency clause that the new home purchase relies on, such as the buyer's current home must sell. Other items that may be in the agreement include disclosures about lead paint in the property, title insurance information, and the closing and possession dates for the home.

What is a Real Estate Purchase Agreement used for?

A real estate purchase agreement is used to outline the specifics of a property sale before the final deal goes through. It details things that must happen before the home purchase can be finalized and helps protect both sellers and buyers. This type of contract can be used when a buyer is purchasing a new home that is ready for delivery or a previously owned property.

Why should you use a Real Estate Purchase Agreement?

Having a real estate purchase agreement set in place can help prevent problems and disputes. Sellers and buyers put themselves in a risky position to lose money or time if they go through with a deal without an agreement. For the seller, a real estate purchase agreement may protect against potential title transfer problems or the buyer not honoring the full purchase price. The seller may also be liable for additional fees if not properly transferring ownership.

A buyer should choose to use a real estate purchase agreement to clarify different contingencies. If a buyer needs to sell the current home before finalizing the new home purchase, a purchase agreement protects the buyer from being locked into a legally binding contract. It also allows buyers to use a home inspection as a contingency for the sale moving forward and avoids issues with appraisal values or unexpected costly issues with the home.

How to write a Real Estate Purchase Agreement?

When a home buyer finds the right property, it's vital to have a real estate purchase agreement before going through with the sale. Homebuyers usually choose a property with their real estate agent and then discuss making an offer. The buyer may work with the agent to write up the real estate purchase agreement or draft it alone. The buyer has to consider how much the offer will be and anything they want to add to the agreement about contingencies. If the buyer hasn't sold the current home, it's important to have a clause making the current home's sale a condition of the new property purchase. Additionally, the buyer should think about adding more language in the contract to protect any financial interests.

A real estate purchase agreement may contain the following information:

  • Information about the property seller

  • Information about the property buyer

  • Contact information about any real estate agents involved

  • Address and location of the home

  • The purchase price and deposit

  • Financing or payment details

  • Contingency clauses

  • Lead paint disclosures

  • The date and cost of closing

  • The date of key transfer and physical possession

  • Representations or warranties for the property

  • Whether or not the home or property sale is "as-is"

  • Home inspection details

  • Dispute resolution procedures

  • Clauses for termina

How to Fill Out a Real Estate Purchase Agreement with PDFSimpli in Five Steps?

  • 1. Preparation:

    Before any agreements are drawn up, the seller must first accept a potential buyer's purchase offer on a property or home. Then, the purchaser should move forward with putting together the real estate purchase agreement. The buyer may want to discuss some of the potential language that will be included in the purchase agreement, such as home inspection contingencies or conditions for the appraisal. The buyer may also opt to put down a deposit on the home that shows a commitment to purchasing the property. Additionally, the buyer may also discuss potential situations for termination with the seller before writing the agreement.

  • 2. Choosing a Software:

    The buyer should choose a software program that makes the home buying process less of a hassle. PDFSimpli gives buyers a way to draw up a legal document that helps protect their financial investment into a home. Everything can be done easily through an electronic interface and shared with other parties, such as a real estate agent. PDFSimpli also helps the buyer create a document in an easy to open pdf format.

  • 3. Fill Out or Edit the Real Estate Purchase Agreement:

    After selecting the right software to draw up the document, the buyer either works alone to fill out and edit the agreement or gets help from a real estate agent involved in the transaction. The buyer uses the PDFSimpli software to input common language for a real estate purchase agreement and customizes the document with details about the specific property.

  • 4. Review:

    The review stage is really essential to the agreement's finalization. Purchasing a home or a piece of property is a big decision that often requires a lot of financial resources. The buyer or drafter of the real estate purchase agreement should ensure all of the facts are correct and the agreement is complete.

  • 5. Save, Download, Print or Send for Signature:

    Once the buyer or agreement drafter is happy with the document, it's time to save it and download a copy. It's also a good idea to get a printed copy of the agreement to each party involved in the home sale. The document can also be sent to the seller or the seller's agent electronically to get a signature quickly and start the process of transferring the property to the buyer.

Real Estate Purchase Agreement Frequently Asked Questions:

If a buyer anticipates the possibility of terminating the real estate, there should be a termination clause in the real estate agreement. Residential property deals fall apart for many reasons, such as lack of financing, family issues, unforeseen circumstances, and much more. Buyers can protect themselves from being held liable by including termination language in the real estate purchase agreement.

Buyers sometimes show that they are serious about purchasing a home by putting down an earnest money deposit on the property. The money shows the seller that the buyer is acting in good faith when committing to buying the property. In the real estate purchase agreement, the earnest money should be documented. There should also be a clause in the agreement that allows the buyer to get that money back if the deal falls through.

The last stage of the home sale transaction is the closing. The closing of a property sale brings the buyer and seller together to officially sign over the paperwork finalizing the sale and transferring the home to the new owner. The seller gives the title over to the buyer, and the buyer may have to pay closing costs. The buyer also brings the mortgage commitment letter showing proof of financing.

Sources: