When entering a real estate transaction, it is common for a buyer and seller to execute a purchase and sale agreement. Sometimes called a P&S Agreement or a PSA for short, this legally binding agreement establishes the terms and conditions of the real estate purchase.
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A real estate lawyer typically drafts purchase and sale agreements. They contain essential information like requirements that must be met by the buyer and the purchase price of the property. If you need a purchase and sale contract for a New York real estate transaction, contact Moshes Law, P.C. for a free consultation with an experienced real estate attorney.
How A Purchase and Sale Agreement Works
A purchase and sale agreement is a contract that details the responsibilities of the buyer and seller during a real estate transaction. The purchase and sale document is often confused with a purchase agreement; however, unlike a purchase agreement that is the actual contract for the sale of the property, the purchase and sale agreement outlines how the transaction will be carried out.
Some terms and conditions of a real estate purchase that may be addressed in a contract for the sale and purchase of real estate include:
- Title searches
- Inspections
- Negotiations
- Financing documents
- How money will be transferred
- Additional costs
While a purchase and sale agreement isn’t the agreement to purchase a property, it is an important document that shows the willingness of the buyer and seller to enter the transaction. If you have questions about how a purchase and sale agreement works, it is important to seek legal advice from a knowledgeable real estate attorney.
Elements of P&S Agreement
A purchase and sale agreement establishes the terms and conditions for a real estate transaction and will require certain necessary elements. It is common to find the following information in a standard P&S agreement.
- Purchase Price- The amount agreed upon by the buyer and seller to purchase the property. This price can change during negotiations.
- Earnest Money Deposit- This is usually the amount and how the initial deposit will be paid.
- Closing Date- The closing date is the date that the real estate transaction will be completed. The transfer of property is finalized and recorded on this date, and the seller is paid. Closing dates are subject to change due to unforeseen circumstances like delays with financial paperwork.
- Title Condition- The title condition states that the seller provides the buyer with a clear or marketable title of ownership.
- Title Insurance Company- The purchase and sale contract will include information about the title company. The buyer typically has the right to select the company.
- Contingencies- Any additional conditions that need to be met for the real estate purchase to be completed will be included as contingencies. Some common contingencies include inspection, financing, title, appraisal, and home sale contingencies. If any contingencies are not met, the buyer or seller could cancel the sale.
A purchase and sale agreement may also need to include local or state provisions. If you are considering executing a purchase and sale document in New York, it is best to consult with a local real estate lawyer familiar with local and state laws.
Moshes Law, P.C. has experienced real estate lawyers familiar with drafting purchase and sale documents in New York. Contact Moshes Law, P.C. today for a free consultation. You want to be sure that your P&S agreement is legally binding and covers all necessary elements.
After The Purchase and Sale Contract Is Signed
It isn’t uncommon for a residential real estate purchase to take several weeks to finalize. After the purchase and sale contract is signed, the buyer and seller will need to complete several tasks before finalizing the property sale.
After the purchase and sale document is signed, the following events typically occur:
- Title search- A title search is completed to ensure that the seller has the legal right to sell the property.
- Inspections- Inspections must be completed before closing to show that the property is in satisfactory condition to sell.
- Loan Agreement- Even if the buyer were pre-approved for financing for the real estate purchase, they would continue signing a loan agreement and formally securing financing.
- Transfer of Money- The buyer and seller will agree on how money will be transferred, so at the closing, the seller receives their money, and the title can be released to the buyer. There is usually a down payment, a cash payment in full, or the money is deposited into an escrow account.
- Closing- At closing, the buyer and seller will sign the final documents, including a purchase agreement, to complete the sale of the property.
Purchasing a property is a big decision and involves several steps and tasks that must be completed. A comprehensive purchase and sale contract can help ensure that the process runs smoothly.
Samples Of P&S Agreements
Templates and samples of P&S agreements can be found online. Even though it is possible to use a template, it is wise to have an experienced real estate lawyer look over the contract before executing it. Only a knowledgeable attorney can provide credible legal advice and ensure that the contract for the sale and purchase of real estate is legally binding and contains all necessary elements.
Examples:
SEC Purchase and Sale Agreement
Residential Real Estate Purchase Agreement
Contact Attorney to Draft a Purchase and Sale Contract
If you are entering a real estate transaction, you will need a purchase and sale contract. Don’t leave the drafting of this essential document to just anyone. Contact a knowledgeable real estate attorney who has experience with P&S agreements in New York.
The real estate lawyers at Moshes Law, P.C. are experienced with New York real estate law and drafting purchase and sale documents. They know that purchasing residential real estate is one of the most significant decisions you may make in your life and are here to help. Call today for a free consultation.
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