What does a purchase and sale agreement cost? If you are preparing to purchase real estate, this is a question you may ask. Let’s explore this question and review some general information about purchase and sale agreements and what is essential.
How Much Does a Purchase and Sale Agreement Cost?
A purchase and sale agreement, called a P&S agreement, is a legally binding contract establishing terms and conditions for purchasing and selling real estate.
A purchase and sale agreement is not an agreement to buy the property. Instead, the main purpose is to lay out each party’s obligations for sale to be finalized. This includes fulfilling important requirements like:
- Title searches
- Money transfers
- Closing costs
A purchase and sale agreement must be drafted correctly because this contract facilitates a smooth real estate transaction and property transfer from the seller to the buyer.
Many people hire a real estate attorney to draft the purchase and sale agreement to ensure the contract is complete and free from mistakes. An experienced real estate lawyer will know what terms and conditions to include in your purchase and sale agreement to ensure a smooth buying process.
Based on ContractsCounsel’s marketplace data, the average cost of a project involving a purchase and sale agreement is $440.00.
What’s Included in a Purchase and Sale Agreement
A purchase and sale agreement should cover all necessary tasks and requirements to complete the sale of the house or property.
While purchase and sale agreements will differ based on the parties and property, how the following five steps will be handled should always be addressed in this contract:
- Title search. A title search ensures there is no lien on the property, and the owner has the right to sell the property.
- Inspections. When buying a home, the purchaser will have an inspection completed to assess the property’s condition and note any necessary repairs.
- Loan agreement. A loan agreement ensures that the buyer has secured financing to purchase the property.
- Money transfer. Money transfers are used for the down payment. The buyer should have the money ready for transfer before the closing date.
- Closing. The property will be transferred from the seller to the buyer at closing.
Additional information that can be found in a purchase and sale agreement includes:
- Deposit amount
- How can the contract be canceled
- Personal property and fixtures included in the agreement
- Important dates like escrow and occupancy
- Property inspection terms and conditions
- Closing costs and who is responsible for costs
- Default provisions if one party breaks the contract
Additional covenants, limitations, and conditions can be added as necessary.
Why Do I Need a Purchase and Sale Agreement?
Purchase and sale agreements are important legal contracts and a necessary part of the home-buying process.
The agreement provides each party with clear guidance throughout the real estate transaction. Each party will know its roles and responsibilities to facilitate a smooth ownership transition.
Without a well-drafted purchase and sale agreement, problems could arise during the transaction that can cost both the seller and the valuable buyer time, resources, and money. This contract ensures that both parties are protected throughout the buying process and that the transaction is fair and legal.
Purchase and Sale Agreement Projects
Purchase and Sale Agreement and Sale Drafting
Purchase and sales agreements are important documents because they lay out the terms and conditions surrounding a sale of real estate. Without a well-drafted purchase and sale agreement, both parties risk issues and disputes throughout the home-buying process.
For these reasons, it is common for parties selling or purchasing real estate to hire an attorney to draft a valid purchase and sale agreement. An experienced attorney will know the real estate laws in your state and be able to create a document customized to your transaction that protects both the buyer and the seller of the property.
Purchase and Sale Agreement Review
For a transaction, the seller should provide the purchase and sale agreement. If you are the buyer, you should fully understand what you agree on and what obligations you must fulfill. Before signing a contract, it is recommended that you have your attorney review it.
A real estate lawyer can review the terms of your purchase and sale agreement and ensure that it is fair and protects your rights as the buyer. In addition, your lawyer will be able to explain the contract to you, so you are fully aware of all your obligations in the deal.
Purchase and Sale Agreement Drafting Cost
You will incur legal fees if you hire a real estate lawyer to draft a purchase and sale agreement. In addition, a lawyer will charge for the time it takes to prepare the contract in may include additional fees for consultations and communication.
ContractsCounsel’s marketplace data shows that the average purchase and sale agreement drafting costs $350.00 across all states.
Purchase and Sale Agreement Review Cost
You can hire a lawyer to review the contract if you choose to draft your own purchase and sale agreement. A lawyer will charge for their time reviewing the agreement, but the fees are typically less than drafting fees.
ContractsCounsel’s marketplace data shows the average purchase and sale agreement review costs to be $330.00 across all states and industries.
How Do Lawyers Charge for Purchase and Sale Agreements?
Hourly Rates for Purchase and Sale Agreements
Real estate lawyers often bill clients using an hourly rate fee agreement. The attorney will keep track of their time working on the contract and any other tasks that they complete related to the real estate transaction. After closing, the lawyer will bill their client for the total hours spent working on their case.
Real estate transactions can be unpredictable. Delays and negotiations may require more legal work than the lawyer anticipated. An hourly rate billing structure is the only way a lawyer can ensure they are compensated for all their work.
ContractsCounsel’s marketplace data shows that the average hourly rate for a real estate lawyer ranges from $200 - $350 per hour.
Flat Fee Rates for Purchase and Sale Agreements
When a lawyer is hired for a specific task like reviewing a purchase and sale agreement, they may choose to bill their client using a flat fee rate. The lawyer will estimate the project's length to complete and then quote a reasonable price. If the client agrees, they will pay the fee upfront, and the lawyer will complete the project.
A client must ask the attorney what is covered in the flat rate. For example, extra meetings, communications, or revisions are sometimes not included and could cost more.
ContractsCounsel’s marketplace data shows that the average flat fee rate for a purchase and sale agreement is $440.00.
Get Help with a Purchase and Sale Agreements
Do you need help with a purchase and sale agreement project? If so, post a project in ContractsCounsel’s marketplace to receive flat fee bids from real estate lawyers to handle your project. All lawyers on the ContractsCounsel’s platform are vetted by our team to make sure you are provided with top tier service.