Standard Purchase Agreement Clauses10/23/2020
Purchase agreements are written to clarify most concerns
There are common questions that buyers and sellers ask during the process of a home sale. Questions such as: “Are they leaving the lawn mower?” or “How long will I have after closing to move out?”
Over time, answers to the most common of these questions have been built into our contracts in the form of standard clauses. Most agents who sell real estate in the greater Calhoun County area use a common purchase agreement that has been reviewed by an attorney and is approved by our local Association of Realtors. Here are some of the standard clauses in that contract and the common questions they answer:
The Financing Contingency Clause: This clause requires the buyer to be specific as to how they will be paying for the property (cash, mortgage, land contract, etc) as well as what type of loan they will be getting, if any, what their down-payment and interest rate will be, and it establishes deadlines for the buyer to perform.
The Inspection Clause: Buyers are given the opportunity to do any and all inspections they feel they need to verify the condition of the home. The inspection clause gives them this opportunity, but it also puts a time limit on the process. It gives the buyer the opportunity to re-negotiate or terminate the sale if the inspections reveal concerns. The seller also has the opportunity to terminate the contract if they feel the buyer’s requests are unreasonable.
The Possession Clause: This clause works to be sure that all parties agree as to when the sellers will give possession to the buyer. It also clarifies that the seller will leave the property in its current condition giving the buyer the opportunity to pursue legal action if the seller damages the property or removes items that should not have been removed.
The Clause Concerning Personal Property: Many disagreements have arisen when the buyers and sellers have different expectations as to what stays and what goes. This clause works to clarify expectations and to determine if items that normally are included (like a water softener) are owned by the seller or are rented.
Additional Costs and Who Pays for Them: There are several paragraphs in the contract that address extra items like surveys, home warranties, title insurance, etc. By including standard wording, agents can fill in the blanks to ensure that everyone agrees on what needs to happen to complete the sale and who pays for them.
Utilizing these clauses in the contract, gives agents a consistent method to avoid missed expectations and mis-communication. For this reason, it is important if you are the client that you review the contract carefully and check that blanks are filled in or crossed out to prevent un-answered questions. If you have any questions, direct them back to your agent. Don’t have an agent? Call us – we’re always happy to help.