What is Real Estate Purchase Agreement Drafting?
A real estate purchase agreement is a legal contract between a property seller and buyer. It has to provide information about the property sale, featuring purchase price, payment methods, and more to ensure a smooth transfer.
Since this agreement is legally binding and detailed, you want to ensure it’s drafted properly.
Read this article to explore what key terms should be included in a real estate purchase agreement, how to draft it, and why you should hire a reputable lawyer for help with the process.
What Key Terms Should be in a Real Estate Purchase Agreement?
A real estate purchase agreement contains key terms such as the following:
- Price. The total purchase price must be specified so there’s clarity about how much the buyer will have to pay. There should also be information about how the price is calculated and payment methods.
- Earnest money. This is an upfront payment or deposit that shows the buyer has strong intent to purchase the property.
- Representations and warranties. These are statements made by the buyer and/or seller about the transaction or property, which both parties rely on.
- Governing law. This clarifies which jurisdiction’s laws apply if there is a dispute between parties.
- Closing costs. This section of the agreement explains how fees and other expenses will be shared between parties.
What are Drafting Tips for a Real Estate Purchase Agreement?
When drafting a real estate purchase agreement, there are certain things to include and avoid for clarity.
Keep it Factual
The agreement must contain accurate details, such as parties’ details and descriptions of the property. Having everything done correctly will reduce delays in the process.
For example, the property description must include a legal description as listed in the deed and a physical address. Any asset inclusions and exclusions will also provide clarity.
Include Inspection Provisions
Having inspection clauses in the agreement can serve to protect the buyer’s interests. These should include inspection timeframes, what inspections are allowed, who will be responsible for paying for them, and the seller’s repair obligations.
Clarify Contingencies
There should be conditions that enable either party to cancel the agreement if conditions aren’t met. These can include letting the buyer withdraw if their loan isn’t approved or if the property title has unresolved issues.
Include Property Possession Details
It’s a common misconception that a buyer will always get access to the property at closing. Some sellers might want to have a bit more time to move out of their living space. The agreement should include clarity about the exact date when the buyer will take possession of the property.
Conduct a Title Search
When drafting a real estate purchase agreement, you shouldn’t ignore title and deed clauses. These must include the type of deed and a period in which title issues can be resolved. It’s also encouraged to conduct a full title search so that you can catch any issues prior to them becoming a problem.
Write a Remedies Clause
The real estate purchase agreement should include details about how a contract breach will be handled and what constitutes a breach. Remedies can include forcing the breaching party to complete their duties or paying damages for any losses incurred by the other party.
How Does the Real Estate Purchase Agreement Drafting Process Work?
It’s usually the buyer’s duty to draft the agreement, which can be done with the assistance of a trusted lawyer. When the agreement has been written, it needs to be given to the seller so they can review all its terms closely.
Both parties should discuss or negotiate the agreement so that they can select the most favorable terms which meet both parties’ requirements.
Do You Need a Lawyer for Real Estate Purchase Agreement Drafting?
Hiring a lawyer to draft your real estate purchase agreement is advisable. This document is legally binding and if it’s not properly drafted, it can result in financial or legal issues, as well as disputes.
A real estate lawyer will:
- Address critical terms that should be in the agreement, such as financing conditions, to reduce the risk of expensive litigation.
- Write the agreement in clear terms that are easy to understand, preventing confusion or uncertainty.
- Provide clarity on the complex laws and regulations governing the agreement, so that you remain compliant. They also know about zoning requirements.
- Negotiate with the other party for favorable, balanced terms that protect both parties.
- Conduct title searches to give you peace of mind that nothing will get in the way of your transfer.
- Review supporting documents you might require, such as title reports.
- Draft the agreement in a transparent and professional manner so that the real estate transaction goes smoothly.
Where to Find a Lawyer for Real Estate Purchase Agreement Drafting
Finding a lawyer to draft your real estate purchase agreement doesn’t have to be stressful or time consuming. You also don’t have to cold-call traditional law firms. Online legal platforms make connecting with a reliable lawyer much easier.
On ContractsCounsel, one of the largest online legal marketplaces, you’ll have access to a range of lawyers who are experienced in drafting and reviewing contracts. All lawyers on the platform have been vetted.
To request that a lawyer drafts your agreement, here are the easy steps to follow:
1. Start by visiting the ContractsCounsel marketplace, where you can post your project for free.
2. Include a few details of what you need, such as the type of property and any terms you’d like to include in the agreement, so you match with the right lawyer.
3. You’ll receive multiple bids from lawyers directly on the platform.
4. Once you receive the lawyer bids, you should review the lawyers' profiles. The platform provides extensive lawyer information, such as their location, client ratings, years of experience, and field of expertise.
5. Connect with a lawyer you think is best suited to your requirements and hire them.
