The purchase agreement is a document that is necessary when buying or selling a property. It lays out all the important terms between the buyer(s) and seller(s) in order to complete the transfer of the property.
Contrary to popular belief, there is not a “standard purchase agreement”. Although, there are few that are commonly used, a purchase or seller of a property must be careful when entering into what may be described as “standard”. Once the purchase agreement is being completed each party is responsible for what they each agreed to in the contract.
Also, another misconception is that the purchase agreement has to be completed by the buyer and presented to the seller. Although this is common practice, there are many occasions where the seller may want to complete the form and present it to the buyer.
Some the important items that need to be included in the purchase agreement are:
Price: If a price is not agreed upon, it is really not necessary to go any further with purchase agreement. This is one of the items that can’t be left open.
Names of the parties: Then buyer(s) and seller(s) need to be identified.
Dates: The date of the purchase agreement, how long the offer is extended, when it expires and the closing date.
Legal description of the property: The legal description is not the property address. The legal description of the real property comes from a county recorder’s office. Also, legal description on the property tax statement should not be relied on.
The offering price for the property
In addition to these basics, it can also be a good idea to lay out other critical aspects of the home buying process. Elements such as title requirements, inspections, warranties, and escrow can also be sorted out in the initial agreement.
Must the Offer Be Accepted?
Even if your offer meets or exceeds the seller’s asking prices, they are not required to accept the contract. As veteran home buyers know, there can often be a counter offer made by the other party; subsequently, the counter offer itself can be countered and so on.
Who Can Use a Real Estate Purchase Agreement?
Anyone can use and benefit a real estate purchase agreement during the sale of a home. The most common individuals will be real estate agents and attorneys in states that require attorney presence during real estate transactions.
When Is a Real Estate Contract Used?
Such purchase agreements are used to initiate and outline the home buying process. Despite containing “real estate” in the name, this agreement is typically used exclusively to purchase already-constructed homes, not undeveloped parcels of land.
Can a Real Estate Purchase Agreement Be Cancelled?
At its heart, a real estate purchase agreement is just a contract; so the answer on whether or not an offer can be rescinded depends on a number of factors. When the initial offer is made it’s good for a duration of time specified by the document itself. If the offer has yet to be accepted, it is typically possible to withdraw the offer by notifying the other parties. If you plan to do this, be as thorough as possible. While it’s important to contact the other parties as soon as possible it could be critical to document the withdrawal of the offer as well.
If the offer has already been accepted then cancelling the contract becomes much more involved. First, check if any procedures for cancellation are outlined in the original contract; if they are, you’ll likely need to work within those boundaries to get out of the contract. If there is no clear solution within the text of the contract itself it may be worthwhile to reach out the other people involved in the contract. If the seller of the house has received many, or better, offers they might not have any issue with releasing you from your contractual obligations.
What Happens if there are Disputes Over the Agreement?
As with any legal dispute, there are a few avenues you can take should you find yourself in disagreement over a contract. First, it probably best to consult an attorney. Legal guidance can be invaluable if you haven’t navigated these waters before. Generally speaking, however, legal disputes can be settled through the courts (litigation), by arbitration, or by both parties opting for mediation. The best option will entirely depend on your unique situation.
If you have questions or would like to know more how Attorney Barry Rosenzweig can help you with a real estate purchase agreement, call (952) 920-1001 today.