Did you know that first-time homebuyers accounted for 34% of all homes bought in 2021?
The number will continue growing as more millennials reach their home-buying years. But, many don’t understand real estate deals and may fall prey to unscrupulous sellers. Luckily, you can protect yourself using a purchase agreement contract.
This document protects the rights of sellers and buyers in real estate sales. Contrary to some beliefs, it doesn’t transfer a property’s title. Instead, it highlights each party’s rights and responsibilities to ensure a smooth transaction.
But is this document essential? We’ll let you decide after highlighting some of its benefits.
Let’s get started!
1. It Contains Buyer and Seller Details
We’ve all been victims or know people who’ve been victims of misrepresentation scams. A purchase agreement protects you from such scams when buying or selling a real estate property.
It contains verified buyer and seller names, addresses, and other contact information. So, you can be at peace knowing that you can reach the other party at any moment with ease.
2. It Highlights a Property’s Purchase Price
Have you ever haggled for a friendly purchase price only for a seller to refuse to sell at the last minute? Or agreed on a price with a buyer only for them to change their mind later on?
A purchase agreement contract protects you from having to deal with such situations. It locks in the agreed-upon price, thus protecting buyers and sellers.
However, as with any other contract, a party can challenge its contents if drafted poorly, so you need to be careful.
3. It Provides a Property’s Details
Again, this protects parties, particularly buyers, from real estate scams. This document contains information on the stated property’s location and legal description. It’s a form of property assurance for buyers as it requires sellers to provide a warranty deed.
A warranty deed discloses a property’s encumbrances like fines, liens, and easements. You won’t be held liable for charges accrued on a property before you assumed ownership. So, you can take it as a form of insurance.
4. It Offers a Degree of Protection for Sellers
Sellers can lose money, especially when buyers withdraw their promises to buy property. A purchase agreement protects them from such situations through earnest money deposits.
The agreement requires buyers to deposit money in an escrow account to show their willingness to buy the stated property. The buyer loses the deposit if they withdraw their offer without justifiable reasons.
5. It Prevents Misunderstandings
A buyer can receive their deposit if certain conditions aren’t met by a specified date. A purchase agreement outlines these conditions to prevent disputes when sales fall through. Contingencies specified in purchase agreements include: • Appraisal contingency • Inspection contingency • Financing contingency • Title contingency
check out this website to read about this and more about purchase agreements.
Purchase Agreement Contracts Explained
You can reduce your risk of losing money in a real estate deal by using a purchase agreement. Preparing it may be tasking, but it’s essential as it protects all the parties involved. Did you enjoy reading this article? Great! Then, check out the rest of our blog for similar content.
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