Purchase Agreement Disputes

Purchase agreements cover all aspects of a sales transaction. They contain information about the buyer’s and seller’s legal rights and duties. Essentially, a purchase agreement governs the sale of products (service agreements cover services).

Real estate purchase agreements may be drafted later in the negotiation process and finalize the transaction’s terms.

What’s a Real Estate Purchase Agreement?

A real estate purchase agreement is a type of contract that is created during the purchase or sale of a residence. Contracts govern the terms of sales and provide guidance on the duties, rights, and responsibilities of each of the parties involved.

The majority of states require that real estate purchase agreements describe the property in a specific manner, although each state has slightly different laws. Such descriptions must include measurements and boundary lines but must not include any landmarks on the property that may change over time, such as a garden statue or bird bath.

Additionally, it should be noted that a real estate purchase agreement may involve several different parties, such as the buyer, seller, their respective real estate agents, loan agents, zoning officials, and housing inspectors. Most of these agreements, however, will only bind the buyer and seller.

Contact a local real estate lawyer for more information about real estate purchase agreements and the types of legal issues you should watch out for. Knowledgeable real estate lawyers can guide you on topics related to your matter and ensure that you comply with local laws.

How Does a Real Estate Purchase Agreement Work?

Purchase agreements for real estate can often be different from agreements for other types of sales. Because real estate is unique and “one-of-a-kind,” the terms of the sale must reflect this aspect.

Important information may be included in real estate purchase agreements, such as:

• An identification of the property’s boundaries (and how it differs from others) and its description
• Terms and conditions of sale (price, value, etc.)
• Methods of payment and payment schedules
• All parties involved, including third parties, should be informed
• Closing schedule
• Information about mortgages and loans
• Previous issues with the property (such as easements or additions)

Additionally, the agreement can include many other terms and provisions as needed by the parties. In some cases, the document can be quite complex and may require the oversight of a legal professional during drafting. It is possible for disputes to arise over any of these factors and terms.

Are There Any Terms I Need to Be Aware of in a Real Estate Purchase Agreement?

When entering into a real estate purchase agreement, buyers and sellers should be aware of several important terms.

Although these terms may vary depending on the laws of a particular jurisdiction, most real estate purchase agreements include several basic terms.

Typically, these terms will include:

• The legal description of the property identifies the property’s location, boundaries, easements, and bodies of water. Among the important terms in this category are rectangular surveys, metes and bounds, and lot and block systems. Most likely, a licensed surveyor will prepare these types of reports.
• The terms of the sale (e.g., what must happen in order for the sale to go through), the purchase price of the property, how the property will be paid for, if a mortgage loan or a lien is still on the property, and if the earnest money is required.
• Terms relating to encumbrances on the property, such as mortgages, liens, escrows, property taxes, homeowners’ association fees, or homeowners’ insurance, and who is responsible for paying them.
• Contingency clauses allowing the buyer or seller to exit a contract if they are triggered or not satisfied (e.g., subject to inspection clauses).
• Closing costs, requirements, and how the deed and title will be exchanged on the closing day.
• An outline of all items to be included or excluded in the sale of the home, such as structures, fixtures, and appliances (e.g., light fixtures, window treatments, doors, built-in kitchen appliances).
• Delivery and acceptance dates, as well as the expiration date.
• A description of what will happen if one of the parties fails to complete their legal obligations before the closing date.
• The type of warranty included in the deed, or what the seller essentially agrees to when selling the property to the buyer.
• Who is responsible for paying for inspections or appraisals, and how the results will be handled.
• A blank space for the signing date, along with the names of the seller and buyer and the address of the property.
• Other disclosures, contingencies, or classifications required by the laws of the jurisdiction where the property is located or terms agreed to by the buyer and seller during the negotiations.

It is important for the parties to understand these terms and provisions before entering into a real estate purchase agreement in order to avoid costly mistakes, providing fraudulent information, and preventing miscommunications or ambiguities. For further guidance on drafting and reviewing real estate purchase agreements and their terms, parties should also consult a real estate lawyer.

Before I Enter into a Real Estate Purchase Agreement, What Should I Do?

Before entering into a real estate purchase agreement for the sale or purchase of a home, both parties should prepare themselves properly. If either party has questions about the agreement or the obligations that were determined during the negotiations, they should consult their respective real estate lawyers.

In addition, most real estate transactions follow the “buyer beware” principle. In other words, it is usually the buyer’s responsibility to inspect the property and look for defects or substandard elements.

When it comes time to sign the contract, a party can also take the following steps to protect themselves:

• Inspecting the property themselves;
• Confirming the home’s value by hiring a certified appraiser;
• Having a home inspector inspect the home for safety and to find any hidden defects;
• Obtaining more information about the home itself, the surrounding neighborhood, and the local community by interviewing neighbors or the real estate broker;
• Having a lawyer draft and review the real estate purchase agreement;

What Is the Process for Resolving Purchase Disputes?

Many purchase dispute agreements can be resolved through a home inspection. Boundaries, pricing, and other measurable aspects of the property can often be resolved this way. Legal action may be required to clarify or resolve other disputes.

Legal action may sometimes be necessary to complete a sale, which can sometimes delay the sales process.

If the title is disputed, there may be a need for a quiet title hearing.

Last but not least, a lawsuit can be filed if the agreement is breached (for instance, if the seller sold the property to another buyer after promising to sell it to the plaintiff).

Do I Need a Lawyer for Help with Purchase Agreement Issues?

Purchase agreements can often be complicated and may require the assistance of a commercial lawyer. You may want to hire a lawyer if you need assistance with a purchase agreement document. The document can be drafted and reviewed by your attorney for accuracy.

Additionally, your lawyer can assist with negotiations and other processes. Your lawyer can guide you through the litigation process to protect your interests if you need to file a lawsuit.