Real Estate Purchase Agreements and What They Should Contain

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When buying or selling a home, it can be easy to get caught up in the excitement. However, don’t let daydreams about your prospective home stop you from reading through every document that requires your signature. In fact, the best thing you can do to prevent issues with a real estate contract is to have it carefully reviewed by an attorney. Some provisions that should be in a purchase agreements for real estate, include:

  • Name of the buyer and seller — The contract must contain the full legal names of the individuals/parties buying and selling the property.
  • Legal description of the property — The agreement must sufficiently describe the location of the property.
  • Purchase price and terms — The contract must state the full purchase price of the property as agreed upon by buyer and seller. Further, the agreement must also explain the terms of the purchase.
  • Amount of deposit — The required deposit amount must be present in your purchase agreement. Later, the deposit amount is applied to the purchase price at the closing for the property.
  • How costs of closing are paid — In many cases, the seller covers the cost of the broker’s commission, title insurance, transfer taxes and other fees. However, buyer and seller may work out an agreement to split the costs.
  • Date of closing and possession — Usually, the closing date is the same date the property is transferred from seller to buyer. At the closing, the remaining balance on the property is paid to the owner.

A sound, well-written real estate purchase agreement can prevent disputes from arising.