The Real Estate Purchase Agreement

A real estate purchase agreement is not a roughagreement clearly states who will pay for what. Are
guide to a deal. It is a contract specifying exactlyyou splitting the cost of the fee paid to the closing
what legal obligations each side has. In other words,company? Who is paying each of the other closing
be sure it says what you want it to say, and hascosts. If it doesn't state in the purchase agreement
everything you need in it.that the seller is paying, expect that you are.
Normally, if you are buying a property that is listedFinancing Contingency - Unless you are paying cash,
with a real estate broker, they will have a purchaseyou will probably have to get a loan. A Pre-approval
agreement ready to have the blanks filled in. If youfrom the bank doesn't guarantee much, so be sure
have a buyer's agent that you work with, he or shethat you make the agreement contingent on getting
will have the necessary forms. There are the routinethat loan, and specify the terms. For example, it
parts which are necessary, but not easily forgottenmight read, "This offer is contingent on buyer
or done wrong. These include the following.obtaining a mortgage loan within seven days, at 7.5%
The Date - Names of Buyer(s) and Seller(s) -annual interest or less."
Address Of Property - Legal Description Of PropertyInspection Contingency - You may not need an
- Purchase Price And Terms - List Of Anythinginspection if you are buying land, but with residential
Included With Property - Date The Deal Should Closereal estate an inspection is a good idea. Generally, the
By - Closing Process - Disclosure Statement -clause for this will allow you about a week or ten
Signature With Date For Buyer And Seller -days to get it done. It might read something like this:
Addresses and Phone Numbers Of Buyer And Seller."This offer is contingent on an inspection of the
These may be routine items, but be sure that youproperty at buyer's expense, and buyer's approval of
look all of this over carefully. If the disclosurethe results of that inspection within seven days."
statement clearly states that there is a foundationOther Terms, Conditions or Contingencies - There are
problem, for example, you can't later get out of thesometimes other issues, and you have to address
deal when those cracks in the basement make youthem in the real estate purchase agreement. For
nervous. With the following items, be especiallyexample, if the back yard is full of junk cars, you
careful.better add a clause like, "All cars and junk to be
Real Estate Purchase Agreement - The Crucial Itemsremoved at seller's expense before closing." If you
Good Faith Deposit or Earnest Money - Real estateare shopping alone but your wife needs to approve
agents will try to convince you that your depositthe home, you could also add a clause like, "Offer is
should be as much as possible. There is no "normal"subject to a approval by spouse within two days."
amount, and while it's true that a seller might take anThen your wife can look at the house later and say
offer more seriously with a bigger deposit, this is upyes or no to the deal. As you can imagine, sellers
to you. Real estate is regularly bought with $500may not like that one.
deposits. An alternative is to include a deposit ofIf you are not working with an agent, you can buy
$200, and the line, "to be increased to $2,000 whenan agreement (sometimes called an "offer to
all contingencies are satisfied." That way if thepurchase" or "buy-sell agreement") online or in some
inspection shows nasty surprises your money isn'toffice supply stores. Having a lawyer review all the
tied up while the seller argues that there isn't apaperwork is best. Remember that a real estate
problem.purchase agreement is a binding contract the
Designation Of Who Pays What - Make sure themoment you and the other party sign it.