On behalf of Sayer Regan & Thayer of Sayer Regan & Thayer, LLP posted on Tuesday, March 29 , 2022.
By Mark Thayer, Esq.
Sayer, Regan & Thayer, LLP
A real estate purchase agreement is a legally-binding document that governs the purchase and sale of any property, whether single family home, condo, commercial building or investment property. Created between a buyer and seller, the purchase agreement outlines the terms of the transaction, as well as the conditions under which the sale will occur. The real estate purchase agreement is in place to protect all parties involved.
When planning to buy or sell any piece of property it is critical that you ensure the contract is strong, clear and legal. That’s where a real estate lawyer comes in. Knowing exactly what the terms are involving the property transaction prevents any unexpected snafus or events but, even more importantly, prevents potential legal or financial challenges later on.
Here’s what’s included in a typical real estate agreement.
Common Inclusive Terms
There are many important terms that a buyer and seller should know before signing a real estate purchase agreement. Some of the more common components include:
• Names of the seller and buyer, with signature blocks
• Legal description of the property: This description will identify the precise location of the property (the address), its boundaries, and any easements or bodies of water present.
• Terms of the sale: This will include the purchase price, how the property is to be paid for, if there is a mortgage loan or lien still on the property, and whether there are earnest money requirements or not.
• Other encumbrances on the property: These can include mortgages, liens, property taxes, escrow, homeowners’ association fees, or homeowner’s insurance, as well as who has to pay each.
• Contingency clauses: These offer an “out” for either party to be released from a real estate contract if certain conditions aren’t met. Common contingencies include appraisals, inspections, suitable housing or funding contingencies.
• The closing date: This will outline the date of closing along with any costs or requirements expected on the day of closing.
• All items to be included or excluded in the sale: These can include structures, appliances or fixtures, such as lights, built-in kitchen appliances, window treatments, or doors.
• Date of delivery and acceptance, and offer expiration.
• Terms outlining what happens when one party fails to complete their legal obligations prior to closing.
• Warranty information.
• Requirements for inspections and appraisals, as well as who has to pay for them.
• Anything else that the buyer and seller have agreed to during negotiations.
Knowing the key parts of a real estate purchase agreement helps both parties avoid making costly mistakes. It also clears up any miscommunication or ambiguities so that both parties are in agreeance and understand what is expected of them.
Why You Need a Lawyer for Every Real Estate Transaction
It is highly recommended to have a real estate lawyer on your side to offer legal guidance when it comes to drafting, negotiating, modifying and reviewing real estate purchase agreements. This is because the real estate purchase agreement is one of the most critical documents in the entire property sale process, having the potential to affect the outcome of the final sale.
An experienced real estate lawyer can help with all of the above, and guide you on the many (and ever-changing) real estate laws and protections. In the rare event that a legal issue or dispute arises, you will want your lawyer by your side to represent you in court if need be.
Your real estate lawyer will review all documents before you sign them, making any changes that may be necessary, and ensuring you understand all parts. They work for YOU and look out for YOUR best interests throughout the home sale process.
Contact Sayer, Regan & Thayer LLP for Real Estate Law in Rhode Island
At Sayer, Regan and Thayer, we are ALTA certified and TRID compliant, dedicated to handling your real esate transaction within a secure environment while looking out for your best interests. Thanks to our robust team of lawyers and paralegals, we can get deals closed efficiently and professionally, proud of our strong reputation for success in home purchases and refinances. We are happy to answer your questions, coordinate all schedules, and collaborate with others parties involved in the real estate transaction, such as lenders, real estate agents, home inspectors and insurance agents. Call us today for your free, no-obligation consultation at 866-378-5836.
These materials have been prepared by SRT for informational purposes only and are not intended and should not be construed as legal advice.