Choosing to sell your home without an agent or broker can save you lots of money, but the process is not without pitfalls. The elements that come together to create a real estate purchase and sale agreement are often complicated, and having competent lawyers in your corner who can draft a solid legal contract can help to prevent a good deal from going bad.
A real estate purchase and sale agreement is the contract that is created after acceptance of an offer by both the buyer and seller. Purchase and sale agreements typically include but are not limited to:
Description of Property
The real estate purchase and sale agreement should state both the common residential address of the property and the full legal description of the property. Any easements or restrictions on the property such as HOA regulations should also be included.
Final Sale Price
The price may change during negotiations, but the final, agreed-upon sale price must be included in the contract. The purchase and sale agreement should contain very clear language about how and when the purchase price will be paid in full.
Earnest Money Deposit
When a prospective buyer makes a serious offer, he or she is typically required to put down an earnest money deposit that is usually one to two percent of the purchase price. This deposit is commonly held in escrow until completion of the deal.
The closing date is also included in the real estate purchase and sale agreement. On the closing date, the transfer of property is recorded with the local government and you will receive the money for the sale of your home. Your attorney will prepare and review closing documents and accompany you to the closing.
Some disclosures such as lead-based paint hazards are required by federal law, but state disclosure requirements vary. Carosella & Associates’ knowledgeable lawyers in Delaware and Montgomery counties can advise you on which disclosures are required by Pennsylvania law.
The seller of any property must provide a clear title of ownership to the buyer. Details about the title company you are using must also be included in the contract.
The sale and purchase agreement should contain detailed information about all conditions that must be met in order for the purchase to be completed. Typically, the transaction may be canceled by either party if contingencies are not met.
An inspection contingency allows the buyer to have the home inspected before completing the purchase. If any significant problems are found, the buyer may be able to back out of the deal without losing his or her deposit.
A financing contingency requires the buyer to get pre-approved for a mortgage and should specify the timeframe that the buyer has to find adequate financing.
A title contingency gives the buyer the right to review the home’s title, and may allow the buyer to nix the deal if liens or issues with ownership are found.
An appraisal contingency enables the buyer to cancel the transaction if the appraisal of the property reveals that it is not worth as much as the buyer offered to pay for it.
Carosella’s experienced attorneys can guide you through the process of selling your home FSBO and ensure that your real estate transaction goes off without a hitch.