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Home Purchase Agreement

The contract outlining the agreed-upon price and terms for the purchase of a home. Also called an agreement of sale, a purchase contract, or a sale contract.

Definition

A home purchase agreement is the contract outlining the agreed-upon price and terms for the purchase of a home. Also called an agreement of sale, a purchase contract, or a sale contract.

The contract may cover home financing issues. It might specify dates by which the buyer must have applied for a mortgage, obtained pre-qualification, pre-approval, final approval and close on the purchase. Buyers who miss these dates run the risk of being “out of contract” and losing the property.

Purchase Agreement Explained

When you are buying or selling a house, you will sign a home purchase agreement that outlines the conditions that both buyer and seller agree to, including the purchase price. It is a legally binding contract between the two parties. A carefully written purchase agreement can help the sale proceed smoothly.

Most conditions in the purchase agreement are designed to protect the buyer. For example, the agreement would outline any repairs the seller is expected to make, or any items such as lighting fixtures, appliances or outdoor sheds that are to be considered part of the purchase price. It also
specifies when the buyer will take possession of the home and move in.

Additionally, the purchase agreement will outline conditions under which either party can legally back out of the deal. Financing or legal matters pertaining to an estate are two examples of conditions that can scuttle a sale if they fall through.

If a seller attempts to change or back out of the deal for reasons other than those outlined in the purchase agreement, the buyer may be able to recover damages in court.

Real estate agents and real estate attorneys both have experience in writing purchase agreements that protect your interests.