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Agreement Of Purchase And Sale PDF Free Download
Purchase And Sale Agreement
A purchase agreement is a legal document between a buyer and a seller.
It is a document that outlines the terms and conditions of a sale.
Purchase agreements are often used for high-value items or custom orders where the buyer or seller needs assurance that both parties will follow through with the agreed-upon terms.
A purchase agreement is typically used for more complicated transactions, where several aspects may be involved such as the terms of payment or the delivery of goods.
To be legally binding, it needs to be signed by both the buyer and the seller before any payment is made and goods delivered.
For simpler transactions, a bill of sale or receipt may be enough.
This document can also be referred to as a:
- Purchase and Sale Agreement
- Purchase Contract
Note that the buyer can’t use a purchase agreement to prove ownership — you’ll need a bill of sale to officially transfer ownership of the item from the seller to the buyer.
Difference Between a Purchase Agreement and a Bill of Sale
A purchase agreement is signed before any property or money is exchanged — it’s an agreement between the parties to enter into a future transaction.
The purchase agreement documents the details of the transaction to ensure both parties understand and agree to the terms.
A bill of sale is signed during or after the exchange of money and property.
It documents the transfer of ownership from the seller to the buyer and acts as a transaction receipt.
Use Of Purchase Agreement?
You should typically use a purchase agreement for more complex transactions, or high-value transactions—generally over $500.
You can use a purchase agreement for various transactions such as:
High volume purchases
Either the buyer or the seller can prepare the purchase agreement, just ensure both parties are happy with the terms and conditions of the agreement.
If further terms are negotiated that are not included in the original agreement then you can use a purchase agreement addendum.
How to Buy Real Estate
Finding Homes for Sale
According to the 2017 Profile of Home Buyers and Sellers, the following are the best resources to find a home for sale:
Online Search – In 51% of home sales, buyers reportedly found the property online.
The top three websites to find a home are Zillow.com, Realtor.com, and Trulia.com.
Real Estate Agent – In 30% of home sales, buyers found the property through the use of a licensed real estate agent.
There are about 3 million licensed agents in the United States.
The top three real estate brokerage companies are Century21, Keller Williams, and Sotheby’s International Realty.
Other – In 29% of home sales, buyers found the property through friends and family, seeing a yard sign, a newspaper listing, and other methods.
It’s best to have the mindset of keeping your eyes and ears open at all times when searching for a home.
Get a Pre-Qualification Letter
Unfortunately in the world of real estate, a buyer will find that it is much easier to get into residences and get private showings if they have a pre-qualification letter, which is a statement from the bank that shows that buyer is able to obtain financing under their current financial status.
In other words, a pre-qualification letter certifies the buyer is able to afford the property.
Attending Open Houses
An open house is how a buyer “gets a feel” for the market conditions in their area.
It is recommended to view houses within their price range.
Once an idea of what the buyer is looking for is discovered, the search can be narrowed.
Schedule a Private Showing
This is completed by the buyer or their agent.
The seller, or their agent, will be contacted and the parties will meet at a specific time at the residence.
Usually, the seller and their agent will leave the premises and give the buyer 15 to 20 minutes to look around the home.
If the buyer likes the home, an offer will be made.
Write the Purchase Agreement
The purchase agreement also acts as the offer letter.
The seller will have the choice to accept, reject, or submit a counteroffer.
If the seller accepts, the purchase agreement will be signed and the buyer will be required to submit their downpayment (if any).
Review the Seller’s Disclosures
If an agreement is made, the seller will be required to complete and put forth disclosure forms to the buyer.
These forms will notify the seller of any issues or repairs needed in the home and if there are any hazardous substances on the property.
Earnest Money Receipt – Issued to the buyer after the escrow payment (if any) has been made.
Lead-Base Paint Disclosure Form – A federal requirement for any residence that was built prior to 1978.
Property Disclosure Statement – Completed by the seller to inform the buyer of the current status of all parts of the home, such as the roof (leaks), flooding, electrical, plumbing, heat, etc.
Get the Home Inspected
No matter what the seller tells you, get the residence inspected by a certified inspector in your area.
A certified inspector will be someone who will most likely have an understanding of the issues with homes in the area and will be able to articulate any issues on the premises.
Find a Certified Inspector (epa.gov) – If the residence was built prior to 1978, it may be worth it to get the property inspected by a lead paint specialist who can tell you if there are any issues with the interior.
The main hazard with lead paint is that it can chip and crack over time leaving a powdery-like substance that is extremely toxic, especially to children.
Inspection Tips – It is also best for the buyer to walk around the home and perform their own inspection by:
Walking around the home looking for cracks in the foundation
Check the rafters for holes (due to termites) or general rotting
Walk the outside premises after a rainfall
Pay attention to ceiling details and anything that may show past flooding, leaks, or any repair that is needed
If financing was a condition of the purchase agreement, the buyer will have to go to a local financial institution to apply for and secure funding for their home.
This is commonly known as a “mortgage” and depending on market conditions may require up to 20% for a down payment along with other financial commitments.
Third-Party Financing Addendum
When obtaining financing, a professional known as an “appraiser” will be required to justify the price the buyer is paying.
This will give the financial institution providing financing with the comfort and security they need in the chance the buyer can no longer afford the mortgage payment.
Once financing is finalized, the closing may be scheduled.
Schedule & Attend the Closing
Scheduling the closing will need to be done with a local title company.
The title company will pull the deed and conduct a deed search and ensure that ownership to the buyer is legally feasible.
All documents and attorneys will be coordinated with the title company and after all the due diligence is completed the closing will be scheduled.
At the closing, all documents, disclosures, and funds will be transferred to the respective parties.
This may sound simple but a typical closing can last from a couple to several hours depending on the complexity of the property.
After the closing has concluded, a deed with the buyer’s name will be produced.
Record the Deed
The deed is the legal title to the property which states who is the owner.
This will usually be signed at the closing, as a notary public is required in most states, and afterwards can be filed at the Registry of Deeds in the county where the property is located.
Transfer Taxes –
If there is a real estate transfer tax, this is usually paid at the time of recording the deed.
If payment for the transfer taxes was to be split by the buyer and seller, which is common, the payment should have been made at the closing.
|No. of Pages||10|
|PDF Size||2 MB|
Agreement Of Purchase And Sale PDF Free Download