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A purchase and sale agreement, also known as a purchase and sale contract, P&S agreement, or PSA, is a legally-binding document that establishes the terms and conditions related to a real estate transaction. It defines what requirements the buyer must meet as well as purchase price, limitations, and contingencies. Real estate lawyers generally write them for the buyer and seller to sign. In some jurisdictions, purchase and sale agreements can also be prepared by a real estate agent or broker.
A purchase and sale agreement is different from a purchase agreement in one particular way. Rather than complete the transaction, as a purchase agreement would, a purchase and sale agreement will instead facilitate it while providing clear guidance regarding party responsibility. By signing the contract, you do not agree to buy or sell the house.
Instead, you are determining how to handle:
There may even be a negotiation period when it comes to finalizing the terms and conditions of the purchase and sale agreement. This document is critical since it serves as the basis for the property’s sale and can also demonstrate the seriousness and willingness of both parties by signing it since there are typically cancellation penalties.
Since real estate purchases are more complicated than other purchases, it can take several weeks to finalize. During that period, the buyer, seller, and other third-parties will engage in a series of activities that complete the sale.
Here is what may occur after the purchase and sale agreement is signed:
Once completing these five steps, the buyer will typically receive the keys to take ownership of the property. This purchase or sale is likely the biggest one you will make in your lifetime, which means that you should have a solid purchase and sale agreement in place to ensure that everything goes as expected and you have a serious commitment from the buyer or seller.
Meet some lawyers on our platformSince the purchase and sale agreement is the master document that establishes your purchase or sale terms, it should contain the necessary sections, provisions, and elements.
Below, check out some of the elements included in a purchase and sale agreement:
As you can see, there are numerous facts and considerations that both parties must make when buying and selling a home. Depending upon where you live and other particulars, you may need to add local or state-specific provisions for the contract to oversee a lawful transaction. Ensure that you draft a contract that is right for the type of purchase and sale agreements related to real estate.
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Image via Pexels by Binyamin Mellish
Since the types of purchase and sale agreements vary widely, make sure that you understand the difference between the purchase and sale agreement for a house versus a purchase and sale agreement for a car. While the primary components of a contract largely remain the same across all documents, there are always vital differences that you will notice.
A purchase and sale agreement for a house addresses the specific needs and provisions surrounding the transaction. It will consider escrow, closing, expectations, and use real estate terminology that you will not find in another other type of purchase and sale agreement.
When buying or selling a car, a purchase and sale agreement will describe all matters related to ownership transfer. They tend to be shorter and with fewer terms and conditions. However, they do contain some shared components, including payment, inspection, and transferability.
There are samples of purchase and sale agreements available online. Reviewing them will give you a good sense of what is expected during the process and the type of agreement you are making. Find a purchase and sale agreement used for your exact situation to make the picture even more transparent.
Here are a few samples of purchase and sale agreements:
If you are considering using an online template to create your contract, determine if the transaction you are facilitating is right for the document you need. Due to both parties’ expectations of the sale, consider working with a lawyer to draft a purchase and sale agreement for you.
Problems during a real estate transaction cost both the buyer and seller time, resources, and money. As such, it is imperative that you have a purchase and sale agreement in place that fosters and facilitates the transfer of a home from a seller to a buyer. Contracts carry specific legal implications, which means that you should hire property lawyers to write them instead of using contract templates.
A lawyer will take the time to understand your specific situation and needs to ensure that the agreement is personalized for your objectives. He or she will also guarantee that it complies with all applicable laws in your jurisdiction.
You will have additional peace-of-mind and reassurance knowing that a legal professional created your agreement versus making guesses with templates online. Do not leave the most significant sale or purchase of your lifetime to chances. Protect yourself by working with a lawyer to draft a purchase and sale agreement.
Do you need property lawyers in your state to write a purchase and sale agreement? Look no further. Post your project to ContractsCounsel for free and receive proposals from attorneys today.
ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.
Attorney Garrett Mayleben's practice is focused on representing small businesses and the working people that make them profitable. He represents companies in structuring and negotiating merger, acquisition, and real estate transactions; guides emerging companies through the startup phase; and consults with business owners on corporate governance matters. Garrett also practices in employment law, copyright and trademark law, and civil litigation. Though industry agnostic, Garrett has particular experience representing medical, dental, veterinary, and chiropractic practices in various business transactions, transitions, and the structuring of related management service organizations (MSOs).
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Purchase And Sale Agreement
Asked on Sep 5, 2023I am in the process of purchasing a property and am in need of a Purchase and Sale Agreement. I am unclear on who typically drafts the agreement and am looking for advice from a lawyer. I understand that the agreement should be tailored to my specific needs and am looking for guidance on how to best proceed.
Either the seller or the buyer can prepare a purchase agreement. Like any contract, it can be a standard document that one party uses in the normal course of business or it can be the end result of back-and-forth negotiations. Most often, the buyer's real estate agent will write up and prepare the purchase agreement for a house. Note that agents (not being practicing attorneys themselves) can't create their own contracts. In Florida commonly the parties utilize the Florida Realtors/FloridaBar-ASIS-6 Rev. 10/21/2021. That is an example of a approved form.
Purchase And Sale Agreement
Asked on Sep 9, 2023I am in the process of buying a house and have been presented with a purchase and sale agreement. I am confused about the earnest money portion of the agreement and would like to understand what it means and how it will affect the transaction. I am particularly interested in knowing what happens to the earnest money if either party decides to back out of the agreement.
Good morning. I am a WA State attorney, and I have reviewed numerous purchase and sale agreements (PSA), and have bought and sold numerous pieces of property in WA and CO. You are wise to ask this question. Since you are the buyer, normally your buyer's real estate agent would prepare the PSA for you to use, after discussing with you. Since you said a PSA "was presented to you" I"m wondering whether you are buying a new home from a building contractor. In any event, the purpose to an earnest money payment is to hold the home for you and let the seller know you are interested. In most cases, however, the seller can keep your whole earnest money payment if you back out of a purchase for reasons that are not protected in the PSA. For example, if you write your offer contingent on your subjective approval of an inspection report, or write your offer contingent on obtaining financing at terms you approve of, either one of these terms can get you out of the contract and also have your earnest money returned to you. There should be language in the PSA that clearly states what happens to the earnest money and how much earnest money you are providing. I hope that that is helpful. If you continue to have questions, I urge you to have an attorney review any and all documents, including those for loans, prior to signing anything.
Purchase And Sale Agreement
