Everything You Need to Know About Purchase and Sales Contracts

Major Elements To Be Aware of In An Agreement of Purchase and Sale

Price: The first offer, unless in a bidding war situation, is usually just a starting point. Usually the Buyer wants to meet in the middle between the starting price & your asking. But there are other negotiation strategies to improve this scenario. This is why you need to make sure the realtor you hire has tactically and experienced negotiation strategies.

Deposit: Typically in this area the deposit amounts tend to be on the low end. However if it is a longer closing date you should try to obtain a minimum of 5% to protect your interest should the Buyer fail to close.

Conditions: During the “conditional period” the Buyer will do their own due diligence at their own cost to inspect the home, arrange for insurance, financing, lawyer’s approval of all documentation and any other conditions needed to satisfy them that this is the right purchase for them.

Statements: These are usually warranties, representations, or the items the Buyer is asking the Seller to complete at their cost prior to closing. Be cautious prior to giving any representation or warranties that you have complete confidence in the systems or terms you are representing and warrantying because even though most of these clauses don’t supersede the closing date you can still be held legally liable.

Inclusions & Exclusions: This where you list any appliances or “Chattels” that you would like to leave with the home. Exclusions are items you do not want left with the home. Be sure to ask your realtor the difference between a chattel and a fixture.

Final Walk Through: This is when the Buyers are allowed to come back to see the home. Typically, they will conduct 2. One for showing family members the home and to take measurements for ordering furniture etc. The 2nd is a couple days or the morning of closing to make sure the home has been left in the state they purchased it in and all inclusions as listed in the agreement are still there. If not the Buyer could ask their lawyer to conduct a hold back of funds.

Closing & Possession Date: Generally this is the day the title of the property is legally transferred to the new owners. As soon as this is completed at the lawyer’s office you will need to make sure you have vacated the property.