Residential Purchase Agreement: A Comprehensive Guide

A residential purchase contract is a legal document that provides the seller with a written notice that you are interested in the purchase of his property. The seller has the right to accept the offer, make a counter offer or deny the offer. Including a time frame requesting a response within 48 hours is a good idea. According to Bankrate, make sure you understand all the terms before signing the sales contract since it is a binding, legal document.

Step 1

Place the name(s) of the seller(s) on the contract. List the name(s) of the buyer(s). Include the physical property address. Add the legal description of the property found on the property's title deed or from tax assessor records.

Step 2

Write the date of the offer on the agreement. Also, include the amount of earnest money you are offering. The earnest money is deposited and held in an escrow account until closing.

Step 3

Add the purchase price to the contract. This is the amount you offer for the residential property. Mark the option that matches how you are paying for the property, such as cash. If you are financing the property, make sure the contract states the sale is contingent on financing. Also, include the seller assistance if you are requesting that he pas any closing costs, such as attorney fees.

Step 4

Include a request for the seller to provide a clear title and deed for the property. State in this section what action the seller and buyer must take if any encumbrances are found on the title during the search.

Step 5

Insert a clause stating additional contingencies, such as a survey, pest inspection or home inspection. Place a settlement date on the contract providing a time frame for closing the sale. Also, if you must first sell your home, add that contingency.

Step 6

Place information regarding the payment and prorating of property taxes. Also, include the condition clause stating the residence must be in the same condition at closing as when the offer was accepted. Doing a walk-through inspection before closing allows the buyer to ensure no new damages are present.

Step 7

Add an area for additional provisions. This section may be completed if any appliances or other improvements are staying with the home after closing.

Tip

When preparing a purchase contract, add key words, such as “subject to,” to ensure you have the right to terminate the agreement if all conditions are not met.