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.
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!
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!
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