Known by various names, including “Contract of Purchase,” “Contract for Purchase,” “Sales Agreement,” and “Sales Contract” among many others, a Purchase and Sales Agreement is generally defined as a contract for the purchase and sale of real estate between a Buyer and a Seller, in which the Seller agrees to sell and the Buyer agrees to buy under certain specific terms and conditions. Whether you’re moving to a new home in Cambridge, Allston, Fenway, or even Beacon Hill, it’s important to know about this agreement when drafting an agreement for your new home.
Once you have agreed on the terms, it is time to review and sign the formal purchase and sales agreement. Typically, this will contain the following:
-What property, such as drapes, appliances, and lighting fixtures is included
-The amount of mortgage that the buyer needs to finance the purchase of the house
-Cost adjustments to be made at closing, which can include points, property taxes, etc.
-The amount of buyer’s deposit and where it will be held until closing (it will usually be held in escrow, i.e. by a third party)
-Inspections the buyer may want to make: general home inspections, and more specific inspections for hazards such as radon, termites, asbestos, etc.
-What happens if either party backs out of the deal
-Any special conditions or contingencies: the seller fixing a problem with the house, the buyer obtaining financing, or a satisfactory home inspection report among others
It isn’t uncommon for a closing to be delayed due to one issue or another, such as a delay in the mortgage company processing your application or a number of other complications, and occasionally deals do fall apart at the closing conference table. It’s important to cover these contingencies when drafting your P & S Agreement. A Closing is when the ownership of the house passes from the Seller to the Buyer- the house isn’t yours until the entire process is complete!
Buying a home can be a stressful time, but working with a trusted broker can ease some of that stress. Contact a Warren RE agent today for help in buying your new home. We have listings including luxury buildings, apartments, and condos in a variety of different neighborhoods.