When selling real estate, purchase and sale agreements are used the most.The buyer makes an offer and the seller accepts it.The agreement lays out important terms, such as the closing date, the amount of the deposit, and any special situations that would warrant canceling the agreement.The document is usually prepared by the attorney or the agent who handles the closing process.You may end up drafting a purchase and sale agreement if you are selling your home.You should show your draft to an attorney.
Step 1: The document needs to be formatted.
The purchase and sale agreement needs to be legible.You don't want the other side to claim that you hid information by using small fonts, so set the fonts to a readable size and style.Many people like Times New Roman 12 point.If you want to use your sale and purchase agreement more than once, set it up as a template.blank lines for information that will change from contract to contract, such as the name of the purchaser and the purchase price.
Step 2: A title should be inserted.
The title should be placed between the left- and right-hand margins.Title your document "Purchase and Sale Agreement" or "Agreement to Purchase Real Estate".
Step 3: The parties to the sale should be identified.
The purchaser and seller need to be identified at the beginning of the agreement.You could include blank lines for their names or insert a brief paragraph like the following: "Insert the name of purchaser, offers and agrees to purchase from seller, upon the terms and conditions set forth hereby, the property legally described."
Step 4: The legal description of property should be added.
The legal description of the property is on the deed, so you need to accurately describe it in your agreement.You can get a copy of the deed in your county.You can get a legal description of property.
Step 5: The purchase price should be stated.
The purchase price can be written.After earnest money is credited, the remaining balance will be paid by the purchaser.
Step 6: Do you know any earnest money deposited?
It's a form of security deposit.You should show the seller that you are serious about buying the property.Without depositing earnest money, a potential buyer could claim to be interested in any number of homes, removing them from the market.The amount of money to be deposited and the deadline for depositing it should be included in the earnest clause.The sample language states that earnings will be paid to the agent in the form of a check or money order.You should clarify that the money will be credited to the purchase price once the payment is made.
Step 7: Tell us about the financing.
You need to identify the purchaser's source of financing and ask for proof that they qualify for the financing.A letter from the purchaser's bank or lender is usually sufficient proof.If the buyer is using cash, then the following should be included.The purchaser will pay the balance of the purchase price with a certified check.identify the loan type if the purchaser is getting a loanGive a deadline for receiving the letter and ask for a letter about the loan status.
Step 8: There are items in the sale.
A home may come with personal property inside, such as bookshelves in the wall or a fireplace.You should identify any items that will be sold with the property, such as: wall-to-wall carpeting attached light fixture and bulbs attached mirrors heating and cooling equipment plumbing fixture ceiling fans doors windows, screens, and storm windows built-in kitchen appliances security systems window treatments awnings fencing
Step 9: There are items not included in the sale.
If there is anything the seller is taking with them, be sure to list it in the purchase and sale agreement.You might want to take your kitchen appliances with you.If that is the case, be sure to list them.Pick out any leased items in the house.The purchaser needs to know that you don't own them.
Step 10: The sale is conditioned on the buyer selling their home.
This is important.It's not realistic to expect someone to buy a home if they can't sell their current home.The purchaser can get out of the purchase if they can't sell their home.The offer could be contingent on the buyer selling their home.This offer is not contingent upon the sale or close of property owned by the purchaser.
Step 11: The seller must pay for closing.
The seller needs to pay any existing loans.The seller pays real estate commissions, title insurance policy with the buyer to receive benefit, and the balance on any leased items that remain on the property.The seller will transfer any rental or lease deposits to the purchaser at the end of the transaction.
Step 12: Explain to the buyer what closing costs are.
The buyer can pay a lot of things, including recording fees, transfer taxes, insurance, and settlement fees.
Step 13: Who pays taxes?
The house could be sold in the middle of the tax year.You might want to prorate the taxes.You should explain what the proration will be.You can base the proration on the previous year's taxes, an agreed upon amount, or the most current county information.
Step 14: Get the buyer an Inspection.
Any home purchase includes an inspection.You should include a clause where the purchaser acknowledges that he or she has been advised to have the home inspected.The purchaser acknowledges that it has been recommended that they hire a professional inspector to inspect the property at their own expense.
Step 15: Is the sale contingent on an inspection?
The purchaser may want to get an inspection before signing the agreement.You should state that the sale is contingent on the property inspection.The offer is contingent upon the purchaser getting a property inspection and reports.Structural, mechanical, pest, and physical conditions may be included in the inspection.Within five business days of acceptance of the agreement, written notice will be given to the seller or seller's agent.A line should be included for the purchaser to waive inspection.
Step 16: If the inspection is unsatisfactory, identify options.
You could get a bad report.The purchaser might not want to go through with the sale.The purchaser could accept the condition if you explain it.The seller could give an inspector's certification that the condition has been corrected.A settlement will be negotiated by the purchaser and seller.Within a certain number of days after the seller receives the inspection reports, the agreement becomes null and void.
Step 17: The purchaser should get a survey.
There is a provision where the buyer acknowledges that he or she has been advised to have a survey performed.You can include that information if the purchaser waives the survey.The purchaser should put their initials beside any waivers.
Step 18: The seller's representations should be listed.
A representation is a statement of fact which the seller warrants.The buyer can usually cancel the contract if the fact is false.The seller's representations should be listed.There are no violations of building codes, boundary line disputes, or setbacks in the building that is not in a floodplain or a Special Flood Hazard Area.
Step 19: Tell us about the deed.
The seller will usually transfer a general warranty deed to the purchaser.A warranty deed is basically a promise that the seller has the right to transfer title to the property.No one has a better claim to title.The buyer can file a lawsuit if the promises are false.The sample language said that the seller would convey the title by a valid general warranty deed.
Step 20: Explain how the risk of loss passes.
Between the date you sign a contract and the day you actually close, the building might burn down.Who is at risk?You can explain who is at risk with a risk of loss provision.The seller is responsible for any loss or damage to the property before closing.
Step 21: A dispute resolution clause should be included.
If there is a dispute between the two parties, they may go to court.You can use mediation to resolve your dispute.An agreement to mediation should be included in the purchase and sale agreement.Any dispute arising out of, or relating to, this agreement will be submitted to a private mediation service.The cost of mediation will be shared between the sellers and buyers.
Step 22: The time for acceptance and closing should be identified.
The offer to sell doesn't last forever.There is usually a deadline for acceptance.There is a deadline for closing.Your purchase and sale agreement should include these dates.If the offer is not accepted by the seller in writing, it is void.The closing of the sale will take place after the purchaser receives a title insurance binder showing insurable title in the seller.This offer is made at this location.
Step 23: Add the acceptance by the seller.
The seller needs to explicitly state that it agrees to the contract.If the seller has to pay a fee, include it here.The offer to purchase real estate is accepted in accordance with the terms and conditions specified above.The seller's signature is required for the transaction to proceed.
Step 24: You should show your draft agreement to an attorney.
A purchase and sale agreement is described in this article.Your needs may be different.To find out if anything is missing, you should show your draft to a real estate attorney.You can find a real estate attorney by contacting your local bar association.Call and schedule a meeting once you have someone's name.Ask the attorney how much he charges.