Purchase and Sale Agreement

Writing a good purchase and sale agreement for the purchase and/or sale of real estate can be an

art form. A scrivener can write an agreement that is slanted to the seller, slanted to the buyer or

neutral. You want to be precise when describing the parties entering into the agreement. If you
get it wrong and someone doesn’t do what they were supposed to do, you want to make certain
you can proceed legally against them. You want to describe what you are purchasing with equal
precision. A “book and page” description is helpful. 

If personal property accompanies real property, you want the agreement to describe that. You have to set out the payment terms. Is the deal subject to your getting financing? What’s being paid? How is the price allocated amongst the things being purchased? What is the down payment? Who is going to hold the down
payment? What happens if someone reneges? What happens to the down payment? Does it get brought to closing? Is it forfeited if the deal doesn’t go through? Can someone get an injunction requiring a person to close if they refuse to do so. 

You need to describe a date, place and time for a closing. Are you going to get a Warranty Deed, a Quitclaim Deed, a Fiduciary Deed?  Which is it? Who is going to take title? Can you assign title to a trust or some other entity? What about the dreaded title search? What happens if you find a flaw in title? Who pays for it? Do you get to keep the deal alive while someone fixes the flaw? What if the place burns down between the time you sign the contract and the time you close? Who gets the insurance proceeds? Does the seller have to maintain insurance during the time between the signing of the contract and the closing? Do you want to be able to inspect the place before completing the purchase? What if you find termites after you sign the contract? What about hazardous waste or radon gas or a bad leachfield? What warranties do you want the seller to make? What warranties is the seller willing to make? What disclosures are there about the property? Is there a broker? Is someone getting a commission? Who pays for the title search, the preparation of the deed, closing costs and transfer taxes? Where do notices get sent? What law is going to govern the interpretation and validty of the agreement? 

These are but a few of the factors that go into the drafting of a good purchase and sale agreement. There are many others as well. Buying real estate can be tricky. That’s why there are realtors and that’s why there are lawyers.