Buying or selling real estate is a major financial decision, and having a clear, comprehensive purchase agreement is one of the most critical parts of the process. Whether you’re a first-time homebuyer, a seasoned investor, or someone selling a property, the real estate purchase agreement protects your interests. Continue reading and reach out to the seasoned Florida real estate attorneys here at Ansbacher Law to learn more about what you should include in a real estate purchase agreement.
11 Things to Include in a Real Estate Purchase Agreement
Below is a detailed list of what you should expect to see in a properly executed real estate purchase agreement:
- Legal Names of All Parties: The contract must clearly identify the buyer and the seller using their full legal names. If a corporation, trust, or partnership is involved, the entity’s legal name should be used. Accuracy here is critical, as even minor mistakes can cause complications down the road.
- Property Description: This section should go beyond just the street address. A detailed legal description of the property, including lot number, subdivision name, and parcel ID, ensures that there is no confusion about what exactly is being sold.
- Purchase Price and Payment Terms: The agreed-upon purchase price should be clearly stated. The contract should also outline how the buyer intends to pay—whether it’s through financing, cash, or another method—and when those payments will be made.
- Earnest Money Deposit: An earnest money deposit demonstrates the buyer’s good faith. The agreement should specify how much is being deposited, who is holding the funds (often a title company or attorney), and under what conditions the deposit is refundable.
- Financing Contingency: If the buyer is relying on financing, a contingency clause should be included. This allows the buyer to cancel the contract without penalty if they cannot secure an acceptable mortgage within a specified time frame.
- Inspection Period and Conditions: Buyers are typically granted a period of time to inspect the property. The contract should outline the length of this period, the types of inspections allowed, and what happens if defects are discovered.
- Closing Date and Location: The agreement must state when and where the closing will occur. It’s important to leave enough time for inspections, title searches, and financing to be completed.
- Items Included in the Sale: Fixtures such as appliances, light fixtures, or window treatments can sometimes cause confusion. Be specific about what stays with the property and what the seller is taking with them.
- Title and Deed Information: The agreement should clarify what type of deed will be delivered and whether the seller will provide clear and marketable title at closing. Title insurance may also be addressed here.
- Default Terms and Dispute Resolution: The contract should explain what happens if either party defaults. Will the buyer forfeit their deposit? Can the seller be sued for specific performance? This section may also include mediation or arbitration clauses.
- Contingencies and Addendums: Additional clauses, such as the sale being contingent on the buyer selling their current home, should be included. Any addendums must be attached and signed by both parties.
While there are many templates online, real estate laws and customs vary throughout Florida, which is why a one-size-fits-all approach can leave you exposed. Working with a real estate attorney ensures that your purchase agreement is legally sound. In a market this competitive, that peace of mind is invaluable. If you have further questions about your agreement or would like assistance drafting one, simply contact Ansbacher Law today.