What does a real estate purchase agreement cost? If you are buying or selling real estate, you should know how much this agreement will cost.
Let’s explore this question and review general information about real estate purchase agreements and why they are important.
How Much Does a Real Estate Purchase Agreement Cost?
A real estate purchase agreement is a legally binding contract that defines the terms and conditions of a real estate transaction, like buying a house. This agreement is executed by the party selling the property (seller) and the party agreeing to buy the property (buyer).
A real estate purchase agreement is used to create a smooth selling process because it shows the intent of the parties to complete the sale as long as the conditions laid out in the contract are met.
A real estate purchase agreement includes important details about the transaction:
- How will the buyer finance the purchase
- How much is required as a deposit
- What inspections must be completed
- Whether fixtures and appliances are part of the deal
- The closing date
Real estate purchase agreements will also contain contingency clauses. These are crucial because the contract can be terminated if a contingency is not met during the specified period.
Real estate purchase agreements are important contracts for buying or selling a home, and they must be in writing to be legally enforceable. Therefore, it is common for parties involved in buying or selling a house to hire a real estate attorney to draft this contract and assist with the transaction.
A real estate lawyer will have the knowledge and experience needed to draft a comprehensive real estate purchase agreement that protects both the buyer and the seller throughout the transaction and transfer of property.
Based on ContractsCounsel’s marketplace data, the average cost of a real estate purchase agreement project is $710.00.
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What’s Included in a Real Estate Purchase Agreement
Real estate purchase agreements can be complicated contracts and must include key terms and clauses to protect both parties. Here are some samples of clauses you will find in a real estate purchase agreement:
- Party’s information. The buyers' and sellers' names, addresses, and contact information.
- Property details. The property address, along with a description and any necessary details.
- Purchase Price. The amount the buyer has agreed to pay for the property, including deposits and any additional costs or expenses.
- Representations and warranties . Facts about the property made by the seller about the property's condition.
- Financing terms. If applicable, how the buyer will pay for the property includes details about the loan or lender.
- Fixtures and appliances. What items are included or excluded from the sale.
- Property taxes. Information about taxes imposed on the property.
- Seller assist. Whether the seller will pay part of closing costs.
- Earnest money. The terms and conditions surrounding an earnest money agreement or security deposit show the seller that the buyer is serious about purchasing the property.
- Closing Date. The day that the deal will be finalized.
- Signatures. A real estate purchase agreement must be signed by both parties to be valid.
Contingencies in Real Estate Purchase Agreements
The contingency section of the purchase agreement is one of the most important parts of the contract. A contingency is a condition that must be met for sale to be finalized. Common contingencies in a real estate purchase agreement include:
- Home inspection contingency. If the home inspection reveals defects in the property, the buyer can terminate the purchase agreement.
- Appraisal contingency. Confirms that the home's value is equal to or higher than the purchase price.
- Financing contingency. Protects the buyer in the event they cannot get approved for a mortgage and facilitates the return of the earnest money deposit.
- Title contingency. A title search ensures that there is no lien on the property and that the seller has the legal right to sell the property.
- Home sale contingency. The transaction is dependent on whether the buyer can sell their current home.
Real Estate Purchase Agreement Drafting
Real estate purchase agreements must be drafted correctly to protect the buyer and the seller in a real estate transaction and facilitate a smooth property transfer. Buyers are typically responsible for drafting the contract, and most buyers choose to hire an attorney for the task.
A real estate lawyer will know what needs to be included in the contract and the laws that govern real estate transactions in your state. An attorney can draft your transaction's comprehensive and legally binding real estate purchase agreement.
Real Estate Purchase Agreement Review
If the buyer provides the real estate contract, the seller should be prepared to hire a lawyer to review the agreement on their behalf. Contracts generally favor the party who drafted them. Hence, a buyer needs to have their attorney review the contract to ensure it is fair and protects their interests.
An experienced contract lawyer can review the contract's terms and ensure that the seller is protected. The lawyer will also explain the contract to the seller if they need clarification about any terms.
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Real Estate Purchase Agreement Drafting Cost
If you hire a lawyer to draft a real estate purchase agreement, it will come with costs. If they participate, your lawyer may charge a consultation fee, drafting fees, and their time at the closing.
ContractsCounsel’s marketplace data shows that the average real estate purchase agreement drafting costs to be $880.00 across all states.
Real Estate Purchase Agreement Review Cost
You will be responsible for those legal fees if you hire your attorney to review the real estate purchase agreement. These fees are typically less than drafting costs, but the lawyer will still need to be compensated for time spent on the project.
ContractsCounsel’s marketplace data shows the average real estate purchase agreement review costs to be $640.00 across all states.
How Do Lawyers Charge for a Real Estate Purchase Agreement?
Hourly Rates for Real Estate Purchase Agreements
Real estate lawyers tend to bill clients using an hourly rate fee structure. Under this fee agreement, the attorney will keep track of their time working on the purchase agreement and any other tasks related to the real estate transaction.
After closing, the lawyer will bill their client for the total hours spent working on their case.
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 Real Estate Purchase Agreements
When a lawyer is hired for a specific task like reviewing a real estate purchase agreement, they may choose to bill their client using a flat fee rate.
The lawyer will estimate the project's completion hours and then quote an appropriate flat rate price for all legal services. Many attorneys require flat rate fees to be paid upfront or sometimes in part with a scheduled payment plan for the balance.
ContractsCounsel’s marketplace data shows that the average flat fee rate for a real estate purchase agreement is $710.00.
Get Help with a Real Estate Purchase Agreement
Do you need help with a real estate purchase 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.
