Sales Agreements

Sales Agreements (also called Purchase Agreements) should be used for all real estate sales.  Many people wish that real estate sales could be based on a handshake and, although that sentiment has a strong appeal, it does not recognize the many layers to a real estate transaction.  A well-prepared Sales Agreement will address the common issues and potential problems that may arise, and spell out each party’s rights and responsibilities in order to make the real estate sale occur smoothly.

A few of the issues that either always arise or often arise with a real estate purchase are:

1.  Closing costs.  Excluding costs a buyer may pay to the lender for financing, there are other closing costs that can amount to hundreds, if not over a thousand, dollars.  Conveyance fees, recording fees, title search fees, deed preparation fees, survey fees, prorated real estate taxes, costs of inspections, etc., are just some of the line-items that appear on a typical closing statement.  Who will pay which fees?

2.  Surveys.  In order for a property to be sold and transferred by a deed, the legal description for the property conveyed must meet certain standards set out by the County Engineer’s office.  If the legal description does not meet those standards, the property may have to be surveyed.  The cost for a survey will be in the hundreds or, for large parcels, in the thousands of dollars, and may delay the closing for weeks or more.

3.  Condition of the property being sold.  Will the property being conveyed be sold “as is” or will certain repairs have to be made?  Will the buyer have time to have an inspector inspect the property?  If so, what will happen if the inspector identifies problems?

4.  Closing and possession.  When is the deadline for the closing on the sale?  Will possession of the property be given to the buyer at that time, or will the seller want additional time to move?  If the seller wants additional time, who will maintain and insure the property during that time?

5.  Contingencies.  Does either party need to put conditions or contingencies on the sale?  For example, do the buyers need to sell their old house before they have to close on the new house?  Does the house have to meet certain requirements through inspections before the buyers are obligated to buy?  Do the buyers need to secure financing before they are obligated to buy?

A well drafted Purchase Agreement will address all of these issues.  That way, the parties will not be surprised (or, more likely, angry) and end up in a dispute when they realize certain fees have to be paid or if the house has certain problems that were not expected.

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Dell Burtis Law is located in Tiffin, Ohio and assists clients throughout Seneca, Sandusky, Huron, Crawford, Wyandot, Hancock and Wood County, Ohio, with legal matters relating to Estate Planning (wills, trusts, powers of attorney), Elder Law (medicaid and nursing home planning), Business Law (formation, succession and purchases/sales) and Real Estate (titles, closings, agreements and easements).