| CONTRACT FOR PURCHASE |
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PURPOSE OF CONTRACT. The purpose of the contract is to initiate purchasing
a property and to put the agreement into writing.
EXECUTION OF CONTRACT
With Realtor. Execution of the contract will occur with the assistance of the
realtor. You will supply information into the blanks of a Contract for Purchase
form including the purchase price, contingencies, closing date, etc.
With Attorney. Execution of the contract will occur after being fully typed with the
Buyer and the Seller signing at the attorney's office.
With Realtor and Attorney. The realtor will assist the Buyer in filling out the
Contract for Purchase form with the attorney approving the contract.. This is the
best possible situation as you will have every angle covered and two individuals
to assist you with your questions and concerns throughout the process.
who sign the document. The negotiated details, such as the purchase price, .
A contract for the purchase of property is binding on the individuals are included
in the contract. All details MUST be included in the written contract for the Buyer
and the Seller to be bound to perform these details.
OPTIONAL CLAUSES. The contract for purchase can contain many optional
clauses in addition to the purchase price, the downpayment, the date of the
closing, etc. Since the realtors use a contract for purchase forms with blanks,
the form will contain half a dozen or so possible optional clauses that can
become part of the contract. These clauses are initialed by the Buyer or the
Seller to make the a binding part of the contract. A sample of some optional
clauses is contained on the optional contract clauses page.
CONTINGENCIES. A contingency is a provision of the contract that needs to be
completed before the contract becomes binding on the Buyer and the Seller.
Once the Buyer submits the Contract for Purchase to the Seller, the Seller can
accept the contract with all contingencies, deny any or all of the contingencies,
or counter the offer with removal of one or all of the contingencies. If the Seller
counters, the Buyer must remove the contingencies or the purchase will not
occur.
SIGNING. Once the Buyer and the Seller have agreed upon the purchase price
and all contingencies they will sign (execute) the contract for purchase detailing
the agreement. The Buyer and Seller must then meet the contingency deadlines
for the contract to become binding and for the sale/purchase to occur.
COMPLYING WITH THE CONTRACT
MEETING CONTINGENCIES. The Buyer and the Seller must meet each of the
contingencies prior to the date given in the contract to make the contract
binding upon the parties.
Failure to Meet Contingencies. If the Buyer or the Seller fails to meet the
deadline for a contingency there are several available options: void, amend, or
waive.
Completion of Contingencies. Once each and every contingency has been met,
the Buyer and the Seller are now bound by the contract. Therefore, if either the
Buyer or the Seller do not complete the sale/purchase, that party will be liable
under the contract.
OTHER REQUIREMENTS. Many municipalities and counties have special
requirements like water and septic tests. Mortgages have requirements such
as appraisals, home inspections, termite inspections, etc. Both the Buyer and
the Seller must cooperate with any additional requirements to assure the
sale/purchase occurs.
COMPLETION OF THE CONTRACT
MARKETABLE TITLE. The Seller must furnish the Buyer with marketable title by
tendering a warranty deed at the closing. The Seller must also purchase a title
insurance policy for the Buyer to cover any unknown defects in title.
PAYMENT. The most obvious requirement of a sale/purchase is payment by the
Buyer. The initial payment, called earnest money, at the time the contract for
purchase is tendered by the Seller. The mortgage company will supply the
funding for the mortgage to the title company at the closing which is called
"funding." The Buyer may be required to bring a certified check to the closing to
cover any portion of the purchase not covered by the mortgage.
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