Are you thinking about creating a purchase agreement? Here are all the details about purchase agreements, what they are, and when do you need one. You can also download free purchase agreement templates here. Therefore, keep reading to find out more:
Part 1: What Is a Purchase Agreement?
Purchase agreements are usually used in real estate transactions between two parties, that details the purchase price, the terms of the transfer of ownership, and other details regarding the transaction.
The specific terms can vary from situation to situation. They are also known as sales and purchase agreements. Besides real estate, they can also be used in other businesses too where a sale of any entity is involved.
This agreement finalises the sale of the property by the seller to the buyer. It is the result of all the negotiations between the buyer and the seller.
Get a Free Purchase Agreement Today!
Our purchase agreement template has taken into account terms necessary in transaction documentation. It's perfect to customize if you want to close deals formally without worrying about legal drafting.
Download it now and start your purchasing procedures!
Why Do I need a Purchase Agreement?
Since a purchase agreement details the sale of a property to the buyer, it is very important for real estate transactions.
Having a purchase agreement resolves any potential conflict by describing each scenario of contingency. Further, it discusses the obligations of the buyer towards the seller and of the seller towards the buyer. Therefore, each party knows what is expected of them.
With a purchase agreement, the buyer has an idea on when they can have the possession of the property. It also details the penalties for any delay in this possession date.
Without one, there is no proof that the buyer has actually purchased a property from the seller. This can lead to a lot of conflicts later on.
Disputes over the ownership of a property are common in courts. Having a purchase agreement protects the buyer as well as the seller from these disputes.
Once the buyer has a purchase agreement signed by the seller, the seller cannot refute that they have sold their real estate in question to the buyer.
What is Included in a Purchase Agreement?
A purchase agreement outlines the terms of a real estate transaction. Therefore, it usually includes:
- Price: The purchase agreement should include the price at which the buyer has agreed to buy the property. The price should be the final price after negotiations which both the parties have agreed.
- Contingency: The purchase agreement should detail any plan of action for any contingency that occurs before the sale is finalized. It describes the obligations of the seller towards the buyer and vice versa.
- Terms of Finance: The agreement also outlines the type of finance, the down payments, tenure of finance, etc. Most real estate buyers cannot afford to buy the property in one go, so they get it mortgaged or financed. The purchase agreement should have these details.
- Possession Date: The purchase agreement also talks about the possession date, which tells when a buyer can take control of the property.
- Property Details:The purchase agreement should clearly state the property that is being sold and purchased. Since the property is the basis for the agreement, mentioning it in well defined terms avoids conflicts later on.
There can be many other addons besides this in the purchase agreement. It all depends on what the buyer and the seller have agreed upon beforehand.
However, it is important that anything that is added in the agreement is written well. This is why you need to get an agreement template, created by legal experts.
How to Create a Purchase Agreement?
A purchase agreement is a well written document that needs to be valid from a legal point of view. Many people take it upon themselves to create a purchase agreement. However, this is not really a good idea because of the minute details needed in a purchase agreement.
While a purchase agreement needs to be written by a legal expert, you do not need to hire one to make yours. You can get downloadable purchase agreement templates from CocoSign, which can be customized in any manner that you want.
CocoSign’s has agreement templates for your every need, all you have to do is browse and choose the one that seems most fit.
Further, any clause that you want to be added in the purchase agreement can be added by CocoSign on your request. There is nothing you need to worry about!
Get a Free Purchase Agreement Today!
Our purchase agreement template has taken into account terms necessary in transaction documentation. It's perfect to customize if you want to close deals formally without worrying about legal drafting.
Download it now and start your purchasing procedures!
Wrapping Up
If you wanted to make a purchase agreement, you have all the information you need about them. You also know how to download a purchase agreement template, therefore it is time that you get started with it right away!
DOCUMENT PREVIEW
PURCHASE AGREEMENT
This Purchase Agreement (this “Agreement”) is entered into as of ______ day of _______________, 20______, (the “Effective Date”) by:
Seller(s)
________________________, located at ________________________________________ and ________________________, located at ________________________________________ and ________________________, located at ________________________________________
(collectively “Seller”) and
Buyer(s)
________________________, located at ________________________________________ and ________________________, located at ________________________________________ and ________________________, located at ________________________________________
(collectively “Buyer”).
Each Seller and Buyer may be referred to in this Agreement individually as a “Party” and collectively as the “Parties.”
The Parties agree as follows:
1. Sale of Property. Seller agrees to sell and Buyer agrees to purchase the personal property described below (the “Property”):
____________________________________________________________________________________
________________________________________________________________________________________________________________________________________________________________________
2. Purchase Price. Buyer will pay Seller for the Property and for all obligations specified in this Agreement, if any, as the full and complete purchase price including any applicable sales tax, the sum of $_________________ (the “Purchase Price”).
3. Payment. Payment of the Purchase Price will be made by Buyer to Seller by (Check all that apply)
☐ cash ☐ personal check ☐ money order ☐ cashier's check ☐ credit or debit card ☐ wire transfer ☐ other: _________________________, according to the following schedule: (Fill out all that apply)
A. $_________________ previously paid by Buyer.
B. $_________________ upon the execution of this Agreement.
C. $_________________ upon Buyer’s acceptance of the Property.
D. equal installment payments of $_________________ payable on the ___________ [Day of month] of each month until the Purchase Price is paid in full.
4. Taxes. Buyer will be responsible for filing all required sales and use tax returns in connection with the transfer of the Property. Buyer will also pay all required sales and use taxes and any other transfer costs and expenses that arise as a result of the transfer of the Property. Seller will pay all personal property taxes associated with ownership of the Property and accrued for the period ending on the Effective Date and Buyer will pay all such personal property taxes that accrue thereafter.
5. Delivery. Buyer will be entitled to take possession of the Property on ____________________, 20______. If delivery is to be made at a date after the Effective Date, it is Seller’s duty to ensure the Property is delivered in the same condition as when last inspected by Buyer.
6. Seller’s Representations. Seller represents and warrants that he/she has good and marketable title to the Property and full authority to sell the Property. Seller also represents that the Property is sold free and clear of all liens, indebtedness, or liabilities. Buyer may request a Bill of Sale from the Seller for the Property. Seller makes no other representations or warranties concerning the Property, which is being sold and assigned “as is,” and without any warranty of merchantability or fitness for a particular purpose. Seller expressly disclaims any representations or warranties as to the value, condition, or functionality of the Property or its suitability for any particular purpose and Buyer will have no recourse against Seller for the Property.
7. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of _________________, without giving effect to the conflict of laws principles thereof.
8. Disputes. Any dispute arising from this Agreement shall be resolved through: (Check one)
☐ Court litigation. Disputes shall be resolved in the courts of the State of ______________.
(Check if applicable)
☐ If either Party brings legal action to enforce its rights under this Agreement, the prevailing party will be entitled to recover from the other Party its expenses (including reasonable attorneys’ fees and costs) incurred in connection with the action and any appeal.
☐ Binding arbitration. Binding arbitration shall be conducted in accordance with the rules of the American Arbitration Association.
☐ Mediation.
☐ Mediation, then binding arbitration. If the dispute cannot be resolved through mediation, then the dispute will be resolved through binding arbitration conducted in accordance with the rules of the American Arbitration Association.
9. Miscellaneous. This Agreement shall be binding upon the Parties and their respective heirs, successors and assigns. The provisions of this Agreement are severable. If any provision is held to be invalid or unenforceable, it shall not affect the validity or enforceability of any other provision. The section headings are for reference purposes only and shall not otherwise affect the meaning, construction or interpretation of any provision of this Agreement. This Agreement constitutes the entire agreement
