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By: Chloe Fonacier
In simple explanation, a real estate purchase agreement is a legal written agreement between a real estate seller and buyer. This contract outlines all the sale terms that were agreed upon by both parties. Naturally, the buyer would pay more attention in getting the deed while the seller will focus on getting the cash from the sale. However, there are many important concerns that have to be closely dealt with before closing the deal. In this case, a well-drafted purchase agreement would help prevent misunderstandings related with the sale since it will identify all the pertinent terms and present the complete picture of the deal. This explains why getting familiar with the real estate purchase agreement is important for every interested home buyer even before he start looking into different homes for sale.
To better understand what the purchase agreement is all about, it would be ideal to start off learning about what should be written and the procedures essential to come up with a clear and legal real estate purchase agreement.
Basic Sale Terms
In the purchase agreement for real estate, you will find the basic sale terms. In this portion, you will find the purchase price and the earnest money. The earnest money is the cash deposit required for the intention of securing the buyer's commitment. It also includes the date and the procedure when the buyer will receive the property title. This is also known as the closing part of the sale. Once the buyer and the seller meet all the conditions required to close the purchase agreement, the escrow agent will proceed to document the deed and move on with the dispersal of sale proceeds to the seller.
The Role of An Escrow Agent
The sale of the real estate property starts when both parties sign the purchase agreement; to be followed by opening an escrow with a licensed escrow agent. The name of the agent as well as the escrow instructions will be included in the purchase agreement. It is the duty of the escrow agent to act as custodian to the documents and the funds as agreed upon by both parties.
What About Contingencies?
There are cases when a buyer would consider terminating the agreement and getting the deposit back once he is not happy with the conditions agreed upon. This is why a contingency for any concern of the buyer should be included in the real estate purchase agreement. For example, an inspection period contingency will give the buyer the freedom to cancel the agreement and retrieve the deposit once problems are detected during inspection.
In most cases, the real estate agent is the one responsible for preparing the real estate purchase agreement. There are also some standard forms of this kind that you can find online and pre-printed forms available in most states. On the other hand, there are also buyers and sellers who prefer to have this document prepared by a real estate lawyer. But, regardless who among the qualified real estate professionals prepare the real estate purchase agreement; the most important thing of all is to make sure that all details and inclusions as well as contingencies will work best and fair for both the buyer and the seller.
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