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Type of property: Type of property:Last Update September 13th, 2024
Property Sale Contract
House Buying Agreement
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Table of Contents:A Real Estate Agreement is a legal document that sets the terms and conditions of the sale of a home or other type of property.
The document is also known as a:
In most cases, the buyer will send the form that lists the terms and conditions of the transaction, and then it is up to the seller to accept or reject the agreement.
By signing the binding contract, the other party becomes obligated to complete the sale of the property.
The document does not finalize the transfer of the property, however, it is the first step in completing a real estate transaction.
Take advantage of our easy-to-use Real Estate Purchase Agreement template to help you complete the document creation process.
If you are interested in buying any type of real estate, using this agreement will be necessary.
You should use a Real Estate Purchase Agreement if any of the following apply to you:
You can complete a Simple Real Estate Purchase Agreement if the property’s construction is finished before the contract’s closing date.
In many cases, Real Estate Purchase Agreements are prepared by a real estate agent from scratch.
If the owner of the property is the one selling, then a buyer’s agent could prepare the paperwork as a "dual agency".
You can also take advantage of our Residential Real Estate Purchase Agreement template as a reliable foundation when drafting a document.
Your Real Estate Purchase Agreement must include all the necessary details. Review what to include in your agreement below.
It is essential to know how to fill out a Real Estate Purchase Agreement correctly if you plan to create a document yourself or for your agent.
It is not extremely difficult to write your agreement, especially when using a template, however, you must follow all the steps below to not leave anything out.
Empower your legal journey with LawDistrict’s Real Estate Purchase Agreement template.
Certain states do not require the seller to mention material defects in the real estate property.
If you are purchasing property in one of these states, it does not mean you need to take a gamble.
Take care to verify that you can get out of an agreement if conditions aren't met, such as the owner not repairing part of the property or if there has been no inspection.
The following states qualify as “Buyer Beware” states:
Having the property inspected before signing any agreement will be important if you are purchasing a home in one of these states.
Every state has different requirements regarding disclosures. Understanding the different addendums and disclosures can help save you money if you aren’t disclosed information regarding the condition of the property you are purchasing.
Review the following addendums and disclosures to make a smart purchase of a property.
To help you write your document, you can take a look at the example of a Real Estate Purchase Agreement that we have provided below.
Review the sample below to understand how to outline your document correctly.
There are similar legal documents that may be of help to you during a real estate transaction.
Review these documents to ensure that any property purchase that you undergo is done legally and with as little difficulty as possible.
Browse LawDistrict’s legal library which contains information and templates.
To clear up any doubts you may have regarding Real Estate Purchase Agreements, we have answered some of the most common questions on the subject.
Take a look at the responses to further understand how to create your document.
An offer for a seller to sign an agreement could expire by a certain date.
When creating your Real Estate Purchase Agreement, you can set a due date. If the seller doesn’t agree to it by that date, then the offer will have expired.
You can also add the exact time it will expire on the due date.
If you plan on having a Real Estate Purchase Agreement created from scratch, then you can go to a real estate agent.
You can also create your very own document by using our Real Estate Purchase Agreement template as a reliable reference.
Once your document has been created, you can have it reviewed by a real estate professional, such as a lawyer or agent, to ensure it is ready to use.
Yes, a Real Estate Purchase Agreement is binding. There are consequences for a party who backs out of the agreement if they signed a contract. These consequences could include paying a fee, for example.
This type of agreement does not need to be signed in front of a notary or witnesses in most cases, although it would not be a bad idea to do so.
You are only a few steps away from your own Real Estate Purchase Agreement!
Download our professional examplesTHIS REAL ESTATE PURCHASE AND SALE AGREEMENT (the "Agreement") is made on this the ________ day of ________________, ________ (the "Execution Date")
The Purchaser, _________, with a permanent address at _________
(individually and collectively, the "Purchaser")
The Seller, _________, with a permanent address at _________
(individually and collectively, the "Seller")
CONVEYANCE OF THE PROPERTY
1. The Seller agrees to sell and convey to the Purchaser (individually the "Party" and collectively the "Parties") and the Purchaser agrees to purchase from the Seller, upon the terms and conditions hereinafter set forth, the property situated at _________, and all right, title, and interest of the Seller in and to the property with the following legal description: _________________________________________________________________________________.
The property herein described includes all of the following:
(a) All that certain lot, piece, or parcel of land located in the address mentioned above and as described in this Agreement (the "Land").
(b) All buildings and improvements located on the Land and all the Seller's right, title, and interest in and to any and all fixtures attached thereto (collectively, "Improvements").
(c) All equipment, machinery, apparatus, appliances, and other articles of personal property located on and used in connection with the operation of the Improvements (collectively, "Personal Property").
(d) The fixtures and improvements located on the property and all associated rights, privileges, and appurtenances. Lastly, the property also includes any permits, easements, and cooperative and association memberships (the "Property").
AGREEMENT TO PURCHASE THE PROPERTY
2. The Seller agrees to sell and convey to the Purchaser and the Purchaser agrees to purchase, from the Seller, the Property.
PURCHASE PRICE
3. The purchase price shall be paid in cash at closing. There shall be no financing contingency on such payment for the Property. The purchase price for the property (the "Purchase Price") shall be in the following amount: $_________.
EARNEST MONEY DEPOSIT
4. The Purchaser shall deposit $_________ as earnest money at ____________________ with ____________________ acting as escrow agent (the "Escrow Agent"), on or before ________ day of ________________, ________. If the Purchaser does not deposit the earnest money amount as required under this clause, such failure shall result in the Purchaser being in default under this Agreement.
TITLE GUARANTY POLICY OR TITLE INSURANCE
5. The Seller shall provide the Purchaser, at its own expense and if the Purchaser so chooses, with a title guaranty policy guaranteeing good title to the Property or an owner's policy of title insurance issued from a reputable title company (the "Title Company"). The Title Policy shall cover the total amount of the Purchase Price and dated as of the Closing Date when the sale of the Property becomes final, and the Purchaser takes possession.
The Title Policy will be subject to the following exceptions (collectively, the "Title Exceptions"): building and zoning ordinances; standard utility easements; standard riparian matters; common restrictive covenants relating to platted subdivision; oil, gas, and mineral rights; taxes, mortgages, or deeds of trust and assessments which the Purchaser shall be assuming; discrepancies in regard to shortages in area or boundary lines; and any liens that the Purchaser may have created as part of the financing for the purchase of the property.
TITLE POLICY COMMITMENT
6. The Seller shall provide at its own expense or cause to be furnished to the Purchaser a commitment to issue the Title Policy requested by the Purchaser (the "Commitment"), including copies of restrictive covenants and documents evidencing exceptions in the Commitment (the "Exception Documents"). These documents, however, shall not include the standard printed exceptions. The Seller hereby authorizes the Title Company to deliver the Commitment and Exception Documents to the Purchaser's address as provided in this Agreement.
PROPERTY SURVEY
7. Before the Closing Date, the Seller shall provide the Purchaser and the Title Company with the Seller's existing property survey. The Seller shall also submit an affidavit to the Purchaser and the Title Company, affirming the survey's approval. The survey must have been completed within the past year. In the event that the Title Company or the Purchaser's lender does not approve the survey, a new survey shall be obtained. The cost of the new survey shall be shared equally between the Purchaser and the Seller, and it must be obtained at least seven days before the Closing Date.
OBJECTIONS AND CURE
8. The Purchaser shall have the right to submit a written objection within 10 days after receiving the Commitment and Exception Documents regarding any defects, exceptions, or encumbrances to the title that may make the title unmarketable, not including the Title Exceptions.
9. Except for the requirements in the Commitment that are not waived, failure by the Purchaser to provide a written objection within the allowed time will constitute a waiver on the part of the Purchaser to object. Any timely objections by either the Purchaser or any third-party lender must be cured by the Seller at the Seller's expense before closing. The Closing Date will be delayed as necessary. If the objections are not cured, this Real Estate Purchase Agreement shall terminate, and the earnest money will be refunded to the Purchaser within ten days, unless the Purchaser has waived the objections in writing and elected to close the sale, accepting the title with the existing defect.
REAL PROPERTY DISCLOSURESELLER'S DISCLOSURE
10. The Seller does not know of any material facts that would affect the value of the Property, except those observable by the Purchaser or any known to the Seller, which are disclosed in this Agreement and the attached addenda.
STATUTORY/VOLUNTARY DISCLOSURES
11. The Seller shall be responsible for furnishing the Purchaser with the following disclosures and items as soon as practicable before the signing of this Agreement:
a. Lead-Based Paint Disclosure and a copy of the pamphlet titled "Protect Your Family From Lead in Your Home" from the EPA.
LEAD WARNING STATEMENT AND DISCLOSURE
12. Every Purchaser of any interest in residential real property on which a residential dwelling was built prior to 1978 is notified that such property may present exposure to lead from lead-based paint that may place young children at risk of developing lead poisoning. Lead poisoning in young children may produce permanent neurological damage, including learning disabilities, reduced intelligence quotient, behavioral problems, and impaired memory. Lead poisoning also poses a particular risk to pregnant women. The Seller of any interest in residential real property is required to provide the Purchaser with any information on lead-based paint hazards from risk assessments or inspections in the Seller's possession and notify the Purchaser of any known lead-based paint hazards. A risk assessment or inspection for possible lead-based paint hazards is recommended prior to purchase.
The Seller will disclose all known lead hazards in the attached lead disclosure, as well as furnish to the Purchaser a copy of the pamphlet titled "Protect Your Family From Lead in Your Home" from the EPA and any available report on lead in relation to the Property. The Purchaser, at its sole cost, will be given at least ten days to inspect the Property in relation to lead hazards. This ten-day period may be lengthened, shortened, or waived by mutual written consent of the Parties.
COUNTY DISCLOSURE
13. The Seller is responsible for satisfying any local disclosure requirements before signing this Agreement. Please consult the local county department in which the Property is situated and/or a local real estate attorney to ensure compliance has been met.
PROPERTY ACCESS AND INSPECTION
14. The Purchaser may select inspectors and pest controllers licensed to practice within the State of Alabama or any lawful agent authorized to make inspections to inspect the Property. The Purchaser shall assume the costs of selecting such inspectors and pest controllers. Further, the Purchaser shall deliver to the Seller, within ten days following the inspection report, a written notice of any defects, including a copy of the inspection report. The Seller shall permit the Purchaser or its agents to have access to the Property for the purpose of inspection at all reasonable times. Lastly, the Purchaser shall pay for turning on existing utilities.
PROPERTY CONDITION
15. The Purchaser accepts the Property in its current state and condition without any further work, repairs, treatments, or improvements. However, this does not include the following specific work, repairs, treatments, and improvements that the Seller will perform at its sole cost: Paint the entire interior of the house.
WARRANTIES
16. The Seller makes no express warranties aside from those expressly described in this Agreement or the attached addenda. Following the closing of this Real Estate Purchase Agreement, the Seller shall assign all warranties of the manufacturer that are assignable to the Purchaser.
LENDER REQUIRED REPAIRS
17. Unless the Parties agree to it in writing, they are not obligated to pay for any lender-required repairs or remediation. If any repairs exceed five percent, the Purchaser's lender has the sole option to terminate the agreement. If the Parties do not reach an agreement regarding the lender-required repairs or remediation, this Real Estate Purchase Agreement shall terminate. Further, the earnest money shall be refunded to the Purchaser within ten days of the receipt of the written notice.
COMPLETION OF REPAIRS AND IMPROVEMENTS
18. Unless otherwise agreed by the Parties, the Seller shall complete all agreed work, repairs, treatments, and improvements (the "Work") before the Closing Date. Only licensed professionals may perform the work for such tasks, and all required permits and regulations must be obtained and observed. Any transferable warranties received by the Seller for completed work will be transferred to the Purchaser at closing. The Purchaser may choose to complete the Work if the Seller does not complete the Work before the Closing Date. In this case, the Purchaser shall have a claim for the reimbursement for the Work will be entitled to claim reimbursement for the Work performed.
CLOSING
19. The Closing Date shall be within seven days after any objections have been revealed from the Commitment or Survey have been cured or before _________, whichever date is later. Failure to close the sale on the Closing Date by either Party will give the non-defaulting party the right to pursue any default remedies provided in this Agreement.
20. Following the closing, the Seller shall execute and deliver a general warranty deed showing title to the Property to the Purchaser with no further exceptions to the title of the Property except the Title Exceptions. The Seller shall also furnish a current tax statement that shows that their Property has no delinquent taxes.
21. The Purchaser shall pay the Purchase Price in good funds acceptable to the Escrow Agent.22. All notices, statements, certificates, affidavits, releases, loan documents, and any other required documents under this Agreement, the Commitment, or by applicable law, necessary for the closing of the sale or the issuance of the Title Policy, shall be promptly executed and delivered by both the Seller and the Purchaser.
23. All covenants, representations, and warranties made in this Agreement shall remain valid and enforceable beyond the closing date.
POSSESSION24. Upon proper funding at closing, the Seller shall deliver possession of the Property to the Purchaser in its current or required state, ordinary wear and tear excepted. In the absence of an authorized written lease agreement, if either the Purchaser has possession prior to closing or the Seller has possession after closing, a tenancy at sufferance relationship shall be established between the Parties. Both Parties are advised to consult their respective insurance agents to ensure adequate coverage is in place during the transfer of ownership and possession.
SETTLEMENT AND OTHER EXPENSES
25. Unless both Parties agree otherwise in writing, the Seller (the "Seller's Expenses") shall be responsible for paying the following expenses at or prior to closing:
a. All existing liens; prepayment penalties; recording fees; lender, tax statements or certificates; preparation of deed; half of escrow fee; title expense, and any other expenses payable by the Seller under this Agreement must be released or discharged accordingly.
26. The Purchaser shall pay for the following expenses (the "Purchaser's Expenses") must be paid at or prior to the closing:
a. The Purchaser shall be responsible for loan origination, discount, buy-down, and commitment fees.
b. The Purchaser shall also bear all expenses related or incident to any loan, including but not limited to, appraisal fees, application fees, credit reports, loan document preparation fees, recording fees on notes and mortgages or deeds of trust, as well as recording fees on the deed, financing statements, inspection fees, half of the escrow fees, all prepaid items including flood and hazard insurance premiums, documentary stamp tax, and all other expenses necessary for the Purchaser to perform their obligations under this Agreement. All such expenses must be released or discharged accordingly.
27. The Purchaser shall be responsible for any Private Mortgage Insurance Premium (PMI), the VA Loan Funding Fee, or the FHA Mortgage Insurance Premium (MIP) as required by the lender.
28. This notwithstanding, it is important to note that the Purchaser shall not be liable for any charges and fees that are expressly prohibited by FHA and VA financing or other governmental loan program regulations.
29. If either Party pays for any expense and such expense exceeds the amount expressly stated in this Agreement, the Party responsible for the said exceeding amount may terminate this Real Estate Purchase Agreement unless the other Party agrees to pay the excess amount.
PRORATIONS
30. At the closing Date, the following items shall be prorated and adjusted: any taxes due for the current year, association fees, maintenance fees, assessments, dues, heating tank fuel, utility charges, and rents of the Property. In the event that the tax rate for the current year is not known, the Parties will calculate the proration based on the tax rate from the previous year plus an additional five percent at closing. Further, in the event that the tax rate for the previous year is also unknown, then the Escrow Agent will estimate the prorated amount and hold back sufficient funds. The prorated amount will be adjusted once the new tax statements become available. The Purchaser must pay their share of the prorated taxes for the current year if the taxes are not paid before or at the closing.
RISK OF LOSS
31. The Seller assumes all risk of loss to the Property or its improvements, including but not limited to, physical damage or destruction to the Property, or loss caused by eminent domain, until the Closing Date. In the event that any part of the Property is damaged or destroyed after the Effective Date but prior to closing, the Seller is obligated to restore the Property to its previous condition as soon as possible before the Closing Date, with reasonable delays excepted. However, if unforeseeable factors beyond the control of the Seller prevent the restoration of the Property, the Purchaser may elect one of the following options:
a. Terminate this Agreement, and the earnest money will be promptly refunded to the Purchaser within ten days;
b. Extend the Closing Date as necessary to allow for the restoration of the Property;
c. Proceed with the closing, accepting the Property in its damaged state. In this case, all insurance proceeds will be assigned from the Seller to the Purchaser, and the Purchaser will receive an amount equal to the deductible under the Seller's insurance policy.
The Seller's responsibilities outlined in this clause are distinct and separate from any other obligations of the Seller as specified under the Property Condition section.
REMEDIES ON DEFAULT
32. In the event of the Purchaser's failure to comply with the provisions of this Agreement, the Seller may take the following actions:
a. Pursue specific performance of the Agreement;
b. Seek any other legal remedies available;
c. Opt for a combination of the aforementioned remedies; or
d. Consider the earnest money as forfeited, treated as liquidated damages, and the sole remedy for the Seller.
33. If, due to circumstances beyond the Seller's control, the Seller fails to make any non-casualty repairs or deliver the Commitment or survey as required, the Purchaser may choose one of the following options:
a. Extend the performance time and the Closing Date as necessary; or
b. Terminate this Agreement, with the earnest money refunded to the Purchaser within ten days, serving as the sole remedy.
34. In the event of the Seller's failure to comply with the provisions of this Agreement, the Purchaser may exercise the following choices:
a. Seek specific performance of the Agreement;
b. Pursue other legal remedies available;
c. Opt for a combination of the aforementioned remedies; or
d. Consider this Agreement as terminated and receive the earnest money within ten days of cancellation.
ESCROW
35. The Parties hereby agree that the Escrow Agent is not:
a. It is a neutral party and not a party to this Agreement, and shall not assume any liabilities arising from the performance or nonperformance of either the Purchaser or the Seller. The Escrow Agent's liability will only arise in cases of gross negligence or willful breach of the terms of this Agreement;
b. It shall not be held liable for the loss of earnest money resulting from the failure of any financial institution where the earnest money has been deposited, unless the said institution is acting as an Escrow Agent;
c. It shall not be liable for any interest accrued on the earnest money.
36. Following the closing of this Real Estate Purchase Agreement, the excess of the earnest money shall be refunded back to the Purchaser and the rest must be applied in the following order:
a. any cash down payment; and
b. Purchaser's Expenses.
37. The Escrow Agent is obligated to provide prior notification to the other Party before releasing any funds to the requesting Party during the course of this Agreement.
38. Notice from the Escrow Agent to either Party will be considered effective upon deposit at any US Postal Service offices or mailboxes with the receipt requested, as long as the notice bears adequate postage and contains the correct mailing address of the Party as specified in this Agreement. Any objection to the demand for earnest money will be considered effective upon receipt by the Escrow Agent.
SELLER REPRESENTATIONS
39. The Seller hereby represents and warrants that, as of the Closing Date, there shall be no liens, assessments, or security interests from third parties against the Property that will not be fully satisfied from the proceeds of the sale. The Seller's representations and warranties are limited to those expressly provided in this Agreement. In the event that the Seller's representations are found to be untrue on the Closing Date, the Purchaser shall have the right to terminate this Agreement, and the earnest money shall be refunded to the Purchaser within ten days.
FEDERAL TAX REQUIREMENTS
40. The Purchaser shall be responsible for withholding ten percent of the gross Purchase Price from the sales proceeds, as required by applicable tax law if the Seller is classified as a 'foreign person' under the relevant law. The Purchaser shall then submit the withheld amount to the Internal Revenue Service along with the necessary tax forms. However, the Seller may be exempted from this requirement if they provide the Purchaser with a duly executed affidavit stating either of the following:
a. The Seller is not considered a 'foreign person' under the applicable law and provides their United States taxpayer identification number.
b. The Purchase Price is below $300,000.00, and the Property will be utilized as the Purchaser's residence.
NOTICES
41. All notices required under this Agreement must be in writing and signed by the respective Party or its authorized agent. Such notices will be deemed effective when sent via one of the following methods: (a) mailed with the return receipt requested, (b) hand-delivered, or (c) transmitted by email to the following addresses:
TO THE PURCHASER AT:
Name: _________
Address: _________
Telephone: _________
Email: _________
TO THE SELLER AT:
Name: _________
Address: _________
Telephone: _________
Email: _________
