Buying and Selling properties through Purchase Agreement

Purchase Agreement refers to a legal document stating the terms and conditions under which a real estate transaction is to be initiated and carried forward. It states that the seller has agreed to sell the property and the buyer to buy it under the specified terms. As soon as the document is signed, it becomes a legal obligation for both the parties to perform or act in the manner as defined in the agreement.

The agreement reveals the following information.

• Purchase price of the property
  
• The earnest money deposit or down payment towards the sale price.
  
• Who will collect earnest money, who's the closing agent.
  
• Legal description of the property to be sold.
  
• Date of closing when the sale will be finalized and the property will be handed over to the buyer.
  
• Items included and excluded from the sale agreement.
  
• The guarantee given by the seller that he will provide clear title to the property by use of abstract of title, certificate of title or a title insurance policy
  
• The seller stating that he will pay the utility bills, property taxes, insurance and other housing expenses through the date of closing.
  
• A statement regarding the return of your earnest money if the sale could not be completed on account of specific reasons.
  

The Purchase Agreement includes other details and clauses as given below:

• An inspection clause that gives you the right to get your home inspected by a professional inspector within a few days of signing the contract.
  
• Mortgage contingency clause which allows you to cancel the deal if you are unable to get a mortgage at a specific interest rate and that too within a short time period of 30 to 60 days.
  
• The Liquidated Damages Clause that obligates the seller to pay you a certain amount of cash for each day the house isn't available to you even after the actual date of the occupancy.
  

The parties in the transaction can modify, remove or add information in the agreement itself. But the changes must be in accordance with the law and signed upon by both the parties.