The Real Estate Purchase Agreement Simplified

Submitted by: genwright

A Real Estate Purchase Agreement, or purchase contract, is an agreement that outlines the specifics of a real estate sale. This document is usually completed by the buyer who submits it to the seller with their bid for the property. The document is straight forward, but must be completed with care. Should the seller accept the bid, the purchase agreement is a binding contract between both parties.

A purchase agreement should contain any information relating to the sale of the property. The names of the buyer and seller, as well as the property's address, municipality and county should be listed. Finally, a contract must contain the closing date, often listed as the number of days from the submission of the contract, and the buyer's bid on the property.

When a buyer fills out a purchase agreement, they should include any contingencies that must be met before the sale of the house. These often include property inspections, repairs to structural damage or the ability to secure a mortgage. Such contingencies should be documented in writing and agreed upon by both the buyer and seller before the contract is finalized.

A complete real estate purchase agreement should also contain the amount of earnest money that is held in escrow. Sellers request earnest money for two reasons. First, it ensures that the buyer is serious about purchasing the property, which prevents bids from individuals who may or may not follow through. Secondly, it also ensures that the buyer has a vested interest in diligently pursuing the contract.

Many purchase agreements include a detailed section of what comes, or does not come, with the home. Certain items are assumed to come with the home, such as built in appliances or anything that is actually affixed to the home, however, all items should be spelled out in the contract. Any items to be removed by the seller should also be carefully outlined by the seller with a date, usually the day before closing, by which they should be removed.

Any contingencies or agreements listed in a purchase contract are legally binding once both parties agree to them. If the buyer violates the terms of the contract, such as seeking a mortgage, they may not be legally able to retrieve their earnest money. Conversely, should the owner not fulfill their portions, such as removing property before a certain date, the buyer is legally justified in refusing to purchase the property. Because of this, both parties should be fully aware of all requirements of the agreements to prevent delays in closing.

Buyers filling out a real estate purchase agreement are usually doing so with their realtor. However, there are some circumstances in which you won't be dealing with a realtor. If you're going to be purchasing property without an agent, you can download nearly any real estate contract that you'll need for the sale process.