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Simply put, a purchase agreement is a legally binding contract detailing the sale of property which includes the price and terms of the sale. In many instances, this refers to the sale of real estate. In that case, the following may be mentioned in the contract:
• Names of the Buyer(s) and Seller(s)
• Addresses of the Buyer(s) and Seller(s)
• Address of the property
• Description of the property
• Date the property was acquired
• Additional property included, fixtures, stand along property, etc.
• Condition of the property
• Termite inspection
• Purchase price
• Amount of deposit (if applicable)
• Details of closing
• Any information the Seller needs to disclose to the Buyer
This contract is between the Buyer and the Seller of real estate. Once both parties have signed the agreement, it becomes legally binding. If either party needs to make changes to the contract, it should be accompanied by an addendum. An addendum is generally a counter offer. This form should contain the property’s location, previous selling price that was included in the purchase agreement as well as the proposed selling price, terms of payment and the date or deadline for responding to the counter offer.
In the purchase agreement, the details and terms of the sale apply to both the Buyer and the Seller. The terms of payment as well as any other agreements should be satisfied before completion of the sale.
A good rule of thumb when executing a purchase agreement, or any other legally binding contract, is to consult with your lawyer. He can draw up the contract for you or simply look over a contract that you’ve created. It’s also common for the Buyer listed in the purchase agreement to have his lawyer look over it also. Then, once all parties are fully satisfied, the contract is signed and the agreement becomes binding upon both the Buyer and the Seller.
A purchase agreement is a very necessary item when purchasing real estate or any other high dollar commodity.
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