Many variations of the purchase agreement exist. Further, different publishers structure their purchase agreements and addenda in a variety of ways. However, many universal characteristics exist.
Nearly all purchase agreements will first identify the participants in the transaction as well as the underlying real estate, then proceed to other sections.
The parts of the purchase agreement form published by RPI (Realty Publications, Inc.) include:
Identification: the date and place of preparation, the buyer’s name, the amount of the good-faith deposit, the description of the real estate, an inventory of personal property included in the transfer and the number of pages contained in the agreement and its addenda. [See RPI Form 150 Sections 1 and 2]
Price and terms: variations for payment of the price by conventional purchase-assist financing or a takeover of existing financing. [See RPI Form 150 Sections 3 through 10]
Acceptance and performance: aspects of the formation of a contract, excuses for nonperformance and termination of the agreement, such as the time period for acceptance, the broker’s authorization to extend performance deadlines, financing of the price as a closing contingency, procedures for cancellation, a sale of other property as a closing contingency, cooperation to effect a §1031 transaction and limitations on monetary liability for breach of contract. [See RPI Form 150 Section 11]
Property conditions: the buyer’s confirmation of the physical condition of the property as disclosed prior to acceptance by the seller’s delivery of reports, warranty policies, certifications, disclosure statements, an environmental, lead-based paint and earthquake safety booklet, operating cost and income statements, and homeowners’ association (HOA) documents not handed to the buyer prior to entry into the purchase agreement, as well as by the buyer’s initial inspection, personally or by a home inspector, and final inspection at closing. [See RPI Form 150 Section 12]
Closing conditions: the escrow holder, escrow instruction arrangements, closing date, title conditions, title insurance, hazard insurance, prorates and mortgage adjustments. [See RPI Form 150 Section 13]
Notice of supplemental property tax: notifies the buyer they will receive supplemental property tax bills they are to pay when the county assessor revalues the property after a change in ownership. [See RPI Form 150 Section 14]
Notice regarding gas and hazardous liquid pipelines: notifies the buyer of the public availability of information regarding gas and hazardous liquid transmission pipelines via the National Pipeline Mapping System (NPMS) web site. [See RPI Form 150 Section 15]
Brokerage and agency: authorizes the release of sales data on the transaction to trade associations, sets the broker fee, confirms delivery of the agency law disclosure to both buyer and seller and confirms the confirmation of the agency undertaken by the brokers and their agents. [See RPI Form 150 Section 16]
Signatures: the seller and buyer bind each other to perform as agreed in the purchase agreement by signing and dating their signatures. [See RPI Form 150 Section 17]
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