Ultimate Guide to Purchase Agreements in Real Estate Transactions
When both parties agree on the purchase price and other aspects of a real estate sale, they must sign a purchase agreement. This essential document captures the precise price of the real estate, the amount of earnest money to be deposited, and any financial contingencies required by the buyer.
Financial contingencies often make the final sale dependent on the buyer securing necessary bank financing. Additional contingencies might include a satisfactory home inspection, required repairs to the home, and certain environmental standards to ensure property safety. The agreement could also outline any home warranties covering damages and workmanship issues.
The closing date and escrow information are typically included. If there is a lease period before the sale is finalized, the agreement lists the lease price, time period, and specific terms of the lease as well.
Understanding and clearly outlining these elements in advance ensures a smooth transaction process, protecting both parties involved in the deal.
Related Terms: Sales Contract, Offer to Purchase, Contingency Clause, Escrow Agreement.
