A Sale Agreement is a document you’ll receive as a buyer after mutual acceptance on an offer. The document states the final sale price and all terms of the purchase. Moreover, this agreement assures you the seller won’t back out neither will you.
The specific items in this contract vary, but will almost always include the following:
Final Sale Price
This is the purchase price agreed upon by the buyer and seller. Note that this price might change during negotiations before the closing date. For instance, if the home inspection turns up a problem with the home, you as the buyer may be able to negotiate a reduced purchase price.
Money Details
The agreement will include information on the money deposit, such as the amount and instructions for making the deposit. In most areas, the buyer will need to deposit a personal or cashier’s check within one to three days of mutual acceptance. The check will be held by a neutral third party until the completion of the deal.
Closing Date
On your closing date, the purchase will be completed; the transfer of property will be recorded with the local government, and the seller will receive the money for their home. Usually, you’ll sign all the necessary paperwork a day or two before your closing date. Your closing date may change, however, due to unforeseen events, such as your financial paperwork taking longer than expected.
Title Insurance Company
The information about your title company will be included in the agreement. As the buyer, you always have the right to select a title company, though it may be local custom for the seller to choose. You should talk to your agent or lawyer if you have any questions about choosing a title company
Title Condition
The agreement will include a deal that the seller will provide a clear or marketable title of ownership to the buyer.
Sale Agreement Contingencies
Contingencies are conditions that must be met in order for the home purchase to be completed. If one of these contingencies are not met, the sale may be cancelled by the buyer or seller. Here are some examples of common contingencies — but be careful — never assume that these contingencies exist in your contract. Always check with your agent or lawyer.
- Inspection Contingency: This contingency allows you as the buyer to have the home inspected before going ahead with the purchase. If the inspection turns up a problem with the home, you can renegotiate with the seller, who may repair or offer a credit for the problem. If the problem is severe, you can back out of the purchase without losing the money deposit.
- Financing Contingency: This contingency requires you as the buyer to get approved for a mortgage before making the purchase. If the buyer is unable to get mortgage approval after a good-faith effort, he may be able to back out of the deal.
- Title Contingency: This contingency gives you the buyer the right to review the home’s title for problems or conflicting claims of ownership. If the title review turns up a serious problem with the title, you can back out of the deal.
- Appraisal Contingency: This contingency allows you the buyer to back out of the deal if the home’s appraisal reveals that the home is not worth as much as the buyer intended to borrow and pay for it.
- Home Sale Contingency: Less common than the other contingencies listed above, this contingency gives the buyer the right to back out of the deal if she is unable to sell her current home.
The bottom line:
In some situations, the escrow agents handling the closing process, the buyer’s agent is responsible for preparing the agreement. In other cases, where lawyers handle the closing, the lawyers will prepare the document. The buyer, seller and their respective agents will sign the document. Furthermore, have your agent explain the agreement to you before you even close a deal.
In conclusion, property sales vary, you’ll need to do your research and discuss with your agent which option is better. On the other hand, most closing deals don’t go to escrow agents. However, if you feel this option is better for you, you can choose it.
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