The Purchase and Sale Agreement: It’s a Big Deal!
You’re sitting at the table and looking at the PILE of paperwork that comes with buying your first home. Every piece of paper is important in some way, but the “big deal” is the Purchase and Sale Agreement.
The Purchase and Sale Agreement is a written offer from the potential buyer of the property to the owner of that property. The agreement lists the details of the transaction to protect both parties. If and when agreed to, there is a “meeting of the minds.”
In real estate, an agreement is tailored to specific properties such as single-family homes, multi-family homes and vacant land and contains a list of details important to the sale of a property. Here are some of the details you may find in your agreement.
Purchase Price Offer
One of the main details both parties want to know is the purchase price. As the buyer, your offer is considered and may be countered by the seller based on price or other terms. One of the important items to pay attention to is an expiration date of the offer. The offer cannot be accepted after expiration date unless all parties agree to modifications. Many realtors call this a “trigger” date. It is often seen in “hot” buying markets when several buyers are competing against each other.
Description of Property
Both the common mailing address and a legal description of the property will be included in the agreement. Residential developments are identified by subdivision, lot, block and section, and land and non-subdivision property are defined by the tax ID and/or tax map number.
Chattels, attached personal property such as appliances, light fixtures and even built-in shelving are specifically identified in the body of the agreement. Other personal property such as a pool table or playground equipment which may or may not convey should be identified and written into the agreement on behalf of the buyer. Do not assume all appliances convey just because some do. Be specific. Make sure your realtor is aware of the details and how you want your offer to be structured.
Who’s Who
Another crucial detail is information on which companies are handling the title to the property, the loan, closing and escrow. This information is important to make sure paperwork is properly transferred to the new owner. By and large, I believe a transaction is smoothest when both the seller and buyer use the same title or closing company, an impartial party that does not represent the buyer or seller unless monetarily retained. Keeping buyer and seller information under the same roof allows for faster and more responsive flow of communication.
Contingencies
As I noted in the blog “It’s Always Something,” the first thing to remember about contingencies is there are always more than one. However, they are extra protections for all parties involved. These can include home inspection and appraisal contingences that can save the buyer cash and heartache trying to deal with unexpected repairs or taking possession of a property that isn’t worthy of its value.
There are so many other items that may be included in the Purchase and Sale Agreement that I can’t even list them all here, but I should share just one more: the closing and possession dates. Who doesn’t want to know when they can jump in and start their new adventure? The closing day is an exciting time for all. It is when the seller signs the title work to transfer the deed and lending paperwork is signed off by the buyer to complete the purchase.
Typically keys are handed over to the new buyer, possession is taken and the moving trucks are ready to unload. However, this day may or may not be the official closing date. The official closing date occurs when the transaction is recorded in the county, city or jurisdiction for which the property is located. The title or closing company has two business days to record the transfer. Once the transfer is recorded, funds are dispersed to the seller and any lien holders, and the transaction is officially complete!
If you want to learn more about Purchase and Sales Agreements or are ready to buy or sell a home please contact Belinda Jacobson-Loehle at Jacobson Realty and Home Staging today.
You can also learn more by downloading my FREE e-book, “The Real Estate Key – What You Need to Know”!
1,643 total views, no views today
