Purchasing a home in Pennsylvania involves reading and signing a lot of paperwork. You will be asked to review many different types of contracts and it is important to understand what each one is and the purpose it serves.
Even if this is not your first time buying a home, you should always carefully read each document and make sure you understand what it means.
Although you are not required to, it can be beneficial to have legal advice when reviewing and signing each contract.
The sales process
Real estate transactions typically start with a buyer making an offer to the seller to purchase the property for a certain price.
The seller then has the option to accept or reject the offer or propose their own counteroffer.
After any negotiations are complete and an agreement is made, both parties will sign a real estate purchase agreement.
The real estate purchase agreement is a contract between the buyer and seller of the real estate. It spells out in detail how the sale of the property will occur.
The purpose of the agreement
This document is important because it provides instructions on what is to be done in certain situations. Many real estate transactions encounter unexpected occurrences or hindrances, and your purchase agreement can state what happens if these occur.
Like any other contract, your real estate purchase agreement is a binding legal document, so it is vital that you adhere to the terms. If you find that you are going to be unable to fulfill one of your obligations under the contract, you should contact an attorney immediately.
The real estate purchase agreement contains much more information than simply the agreed-upon price for the sale.
Basic party and property information
In addition to the price, details about the property, the buyer’s and seller’s contact information, property tax information and title insurance requirements are also included.
Financing
Most real estate sales are contingent on the buyer securing financing. That is, unless the buyer is paying the entire sales price in cash, they must obtain a mortgage to purchase the property.
The real estate purchase agreement usually contains terms about what happens if the buyer is unable to obtain the financing or secures it, but it later falls through.
The parties can agree to cancel the sale or extend any deadlines to see if the buyer can get financing elsewhere.
Warranties and inspections
Other common components of a real estate purchase agreement are warranty and inspection clauses.
The sale usually depends on certain inspections being performed and the real estate passing the inspections for the sale to go through. The seller can also put warranties in regarding the condition of the property.
These are just a few examples of what type of information is generally included in a real estate purchase agreement.
Helping you through the process
You will sign more documentation on your closing date, which is the date the real estate officially becomes yours and you receive the keys to the property.
Having a solid real estate purchasing agreement can prevent problems or complications in the transaction. Having legal assistance through the process is worthwhile.