A purchase agreement is a crucial step in the real estate acquisition process. Everything about the sale, including the property itself and the financial aspects, is spelled down in straightforward terms. Purchase agreements are complex, legally binding documents that can be difficult for both buyers and sellers to understand. Here is everything Harrisburg buyers and sellers need to know about purchase contracts to help clear up some of that misunderstanding.
Purchase Contract Overview
Purchase agreements detail all the terms by which buyers and sellers in Harrisburg“agree to engage in a real estate transaction.” When a purchase [contract] is finalized and signed, both the buyer and seller are effectively “under contract,” as is the subject property. A purchase contract basically outlines the important specifics of a real estate sale transaction and is a legally binding document.
A buyer will “propose conditions for the sale and explain out the crucial financial information, such as [the] offer price,” when she submits an offer to buy a house. Then, the seller will decide whether to accept, reject, or modify the terms of the offer. When all the terms are agreed upon following any negotiations involving counteroffers, the buyer and seller sign the purchase agreement. The term “under contract” will be used to refer to the property that is for sale as well as any parties to the agreement (such as the buyer and seller of a home).
Purchase agreements state “the intent of all parties to engage in a house selling transaction and [describe] the requirements that must be satisfied for the sale to close and ownership of the property to transfer to the new buyer.” The purchase agreement is often drafted by the buyer’s agent. Agents utilise a template and customise it for certain transactions because they are not attorneys and can’t draught a contract from scratch.
To learn more about purchase contracts, you can contact a Harrisburg agent at (717) 489-2849.
What a Purchase Contract Is Not
Although they seem the same at first view, purchase contracts and purchase and sale agreements (PSAs) are different.
… [It] includes details like earnest money needed, the closing date, and specific contingencies the buyer and seller have agreed to. A purchase and sale agreement, or PSA, is a document that is written up and signed after a buyer and seller mutually agree on the price and terms of a real estate transaction. The PSA is the document that establishes the parameters of the house sale and initiates the process leading up to the closing.
Despite the fact that it appears to be a purchase contract, it is not. The sale of the house is not finalised when a PSA is signed. But the sale of the house is finalised when a purchase [contract] is signed. The purchase [contract] is what you sign to complete the transaction, whereas the PSA outlines the specifics of the transaction up until the closing date.
Common Elements of Purchase Contracts
Purchase agreements are fairly specialised legal papers with varying legal requirements from state to state. There are, however, some components that are present in all purchase contracts. For instance.
- Buyer and seller information – Full names and contact information for all buyers and sellers involved
- Property details – Address, property, description, and other pertinent details
- Purchase price – “The total agreed-upon selling price for the property, including any deposits or additional costs associated with the transaction”
- Representations and warranties – “Statements of facts made by the seller regarding the condition, structure, and composition of the property that is being sold”
- Financing – Specific details explaining how the buyer will pay for the property
- Fixtures/appliances – Statement about what fixtures and appliances will or will not be included in the sale
- Title insurance – “A note specifying whether the buyer or seller will be responsible for purchasing title insurance to protect against potential discoverable defects in the property”
- Property taxes – “Citations regarding any property taxes that will be imposed on the property that is being purchased”
- Closing date – The exact on which the transfer of title will take place
- Contingencies – Any condition that must be met before the sale can go through, such as an inspection contingency
- Earnest money – “Terms of any earnest money security deposits that must be made to show the seller in good faith that the buyer is interested in purchasing the property”
- Option to terminate – “[O]ption for the buyer to back out of the deal and terminate the contract up until a certain time before closing”
- Lead-based paint disclosure – Required by law for homes built before 1978
- Signatures – Signatures of all parties involved to finalize the contracts
Purchase Contract Assistance
Purchase agreements are created to safeguard both buyers and sellers and guarantee a seamless transaction from beginning to end. Therefore, whether you’re a Harrisburg agent, it’s essential. Contact us at (717) 489-2849 if you require any help with purchase contracts.