Tips in Creating a Purchase Agreement Template
Purchase agreement is an overriding document which will dictate your purchase / sale’s terms. This is also well known as residential purchase agreement. Whatever you call this, it is very important to know how to make its template rightly with the proper format. We will discuss about it further in this article.
How to Make a Purchase Agreement
If you want to write a purchase agreement template, you have to know what to include in it. In fact, there are many elements that you must provide. First of all, you will need to describe the deposit which is received from the buyer as well as what is going to happen if this agreement is cancelled.
Besides that, you should also include personal property. You have to spell it out specifically. In this section, you can list all of the movable items. Then, you can continue with date of the escrow close & what happens if the closing is delayed.
The next element to be included is the occupancy date. This may be the closing day or a later date to be agreed. What to include next is proration. It is the division of shared expense between the seller & buyer. It also includes the date used for computing them.
This agreement must also contain default provision or what happens if one party does not live up to this agreement. Do not forget to provide the termite inspection that include who pays for the inspection, who pays for remedying deficiencies disclosed and who pays for the preventive measure.
You are also required to include other inspections of property such as roofing inspection or general building inspection. Usually, the buyer is given 10 to 14 days in order to inspect the property related to its system & structure. There may also be inspections for lead & radon levels.
Financing arrangement is the next element to be included. It is a clause that must be written in this agreement which lets ample time for the buyer to apply for & be approved for a loan. You will also need to include the date of occupancy when the buyer can move it.
Next, you should include stipulation for real estate commission payment, closing costs as well as title fees. You also cannot forget to include covenants, conditions & restrictions, too. They are limitations that are placed on the use of land by the owner and the governing operation.
The next element is the contingency for the buyer’s sale or the current home of seller. Usually, the time limit is around one or two months. You also need to include a contingency into this agreement which lets for cancellation when the buyer cannot obtain the insurance of homeowner.
Purchase agreement should also contain a contingency which provides for the buyers to approve the disclosure of the seller. Last, you must provide attorney review. Generally, the time limit is around 5 to 10 days. Now, you can practice writing this agreement when needed.
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