A home purchase agreement is the official document that specifies the price and conditions of a house being sold. These conditions have been agreed upon by both the buyer and the seller. The initial agreement is typically written up by the buyer’s agent when an offer is made. This may also be referred to as a purchase contract, or a sale agreement. These contracts typically include:
- Repairs that the seller must fix (lighting fixtures, appliances, etc.)
- Earnest money requirements
- Closing costs
- Deadlines for the buyer’s mortgage approval
- When the buyer will officially be granted possession of the property
- Conditions that will allow either party to legally back out
Purchase agreements are legally binding, and a well written one can help make the sale of a home a smooth process for all parties involved.
In most states, sellers are legally required to reveal information that may affect the home’s value or safety of its inhabitants, especially if the withholding of these disclosures could potentially harm occupants. These disclosures could include info about:
- Water wells
- Lead paint
- Termite damage
Contingencies are terms that must be met in order for the deal to go through. These terms are agreed upon by all parties. Common contingencies usually include:
- Property inspection and appraisal
- Clear title
If a seller is unhappy with the terms of the buyer’s purchase agreement, they have the option to counter offer. If signed, the counter purchase agreement will also act as a legally binding contract. Changes to the original contract might result in a higher purchase price, or higher earnest money payments. Sellers may also elect to not help cover closing costs. If the buyer does not like the terms of the counter offer, they also have the option to make their own counter offer.
It is important for all parties involved to read the purchase agreement in full, and make sure all details are fully understood. You don’t want to make an agreement you can’t fulfill.