A real estate attorney can help you review a home purchase and sale contract, but there are still items and terms to beware.
The process of buying or selling a home involves many moving parts. Once the deal is close to done, the purchase and sale contract moves to the forefront of your negotiations. This agreement is crucial to ensuring that both parties agree upon terms like the purchase price and closing date.
Let's look at exactly what a home purchase and sale agreement is and the terms and sections you should be aware of before signing in Florida.
What is a purchase and sale contract?
The purpose of a purchase and sale contract is to stipulate all terms in the sale and purchase of a home or property. The buyer and seller are parties to the contract, and the document is a summary of the agreement between them, including important details like purchasing price and key dates.
As with any type of contract, the purchase and sale agreement is a legally binding document. Because terms must be carefully evaluated and worded, working with an attorney is a must. Both the buyer and the seller must be sure that the agreement is properly outlined and that their best interests are represented.
Components of a purchase and sale contract
Even though you'll be working with a real estate attorney on the contract, it's still important that you have at least a basic understanding of what the different clauses and terms mean. This knowledge will help you communicate with your attorney and the other party. Here are the critical components you'll be looking at and why they matter.
- Buyer and seller information: The names and basic information of both the buyer and seller will be included in the contract for identification purposes and must be reviewed carefully to ensure the details are accurate.
- Purchase price: Of course, one of the most important parts of the contract is the price of the home. This should align with the agreed-upon figure or set the stage for further negotiations. The structure of the payment should be outlined (i.e., how much the down payment will be and how much will be financed), and details about closing costs should also be covered. Review all these details with your attorney to ensure accuracy.
- Financing: There may be a finance contingency section, which requires the buyer to qualify for a mortgage so they can buy the house. The buyer may include in the contract that they need to receive a certain interest rate in the approved loan to make the deal work, but these terms must be agreeable to both parties so no one is surprised down the road when something doesn't go as planned. If this section is not included in the purchase and sale agreement, the buyer is responsible to close on the home with or without an approved loan.
- Closing date: This date is when the closing funds will be due and the property's title will be transferred over to the buyer. In Florida, this is usually 30 days, though the buyer will often request an extension if they're managing a loan approval process.
- Personal property: Other personal property items may be included as part of the property sale, such as a washer and dryer or refrigerator. These details need to be outlined in the contract so that there is no confusion about what's included in the deal and what isn't.
- Inspection contingency: The buyer will usually want to get the home inspected to assess its condition and attempt to require repairs before closing, so the seller will be responsible for taking care of any problems or defects, or a credit might need to be negotiated.
- Title insurance: One of the parties will be responsible for paying the title insurance premiums, which should be outlined in the contract. Who pays the premiums can vary in Florida's different counties, but it is often the buyer's responsibility.
In Florida, the Florida Realtors/Florida Bar available contract forms include optional riders to cover other issues in a sale. These can include restrictions or information regarding homeowners or condo associations, or financial obligations of the seller.
If you have questions about a home purchase and sale contract in Florida, the team at PeytonBolin can help. Contact our team of experienced real estate attorneys to get started.