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In real estate transactions where someone will be purchasing a new or previously owned property, a real estate purchase agreement is used. Real estate could be either residential or commercial.

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What is a Real Estate Purchase Agreement?

For the buy/sell parties, the agreement will serve as a formal contract, so the correctness of all the material should be verified twice.

The details of the deal and the asset being bought will be detailed in the purchase agreement. This contains the location of the property and the cost of the purchase. Additionally, each party’s contact information will be required. 

This should also be stated in the legal document if the real estate buying agreement is being reviewed by an expert.

This type of real estate contract may be used whether constructing a new home or buying an existing one.

Depending on the specific real estate transaction, different information may be required about the contact.

Purchase agreements may also be referred to as any of the following:

  • the sales agreement for real estate
  • Home-buying contract
  • Purchase Agreement for Real Estate 
  • Purchase Agreement for a Home

Who Drafts The Purchase Agreement For Real Estate?

The purchase agreement is often drafted by the buyer’s agent. However, real estate agents typically cannot write their legal contracts unless they are properly authorized to practice law. 

Instead, businesses usually employ pre-written, competitive that let sellers fill in the spaces with the details of the sale.

What Should Be in a Purchase Agreement for Real Estate?

The following fundamental components are identified in a straightforward real estate purchase agreement:

  • Buyer and seller information: The full names and addresses of the parties to the agreement.
  • Property information: An correct address for the property and a legal description of the land must be provided.
  • Purchase cost: The entire amount necessary to purchase the property, along with any deposits or modifications.
  • Personal property: Items like a refrigerator, washer and dryer, sofa, and other personal property are all included in the sale of the real estate.
  • Commitments and representations: Specific statements regarding the state of the property (in states where “buyer beware” laws apply, inspections are essential to finding major flaws)
  • Financing: Will the buyer use seller financing or third-party financing, or will the buyer take over the seller’s current mortgage to pay for the purchase?
  • Contingencies: Any requirements that must be met for the contract to be fulfilled.
  • Title protection: a type of insurance that protects against loss of property value owing to the discovery of title problems in the future.
  • Dates of closing and possession: When will the property be legally transferred, and when will the buyer be able to take possession of it?
  • Disclosure of lead-based paint is required for properties built before 1978.

A Real Estate Purchase Agreement: When to Use One?

You need a real estate purchase agreement form if you want to proceed with buying a property.

You must implement this agreement if:

  1. You are a potential purchaser of real estate.
  2. You could want to sell some real estate.
  3. The legal rights of each party to the sale must be specified.
  4. Before the transfer of legal title, you must specify the various responsibilities.

As long as the home’s construction is finished before the contract’s closing date, this purchase agreement may be utilized to buy or sell any residential property.