A home purchase agreement is a binding legal contract between the buyer and seller to transfer property ownership. The contract entails the expenses at closing, the property included, and the price and payment terms decided when the contract is signed.
The essence of a home purchase agreement is to protect either party in the execution of home purchase transactions. If you would like to see some agreement samples, they are available online on easily accessible platforms such as CocoDoc.
Requirements for a Home Purchase Agreement
For one to use a purchase agreement, you have to meet the following conditions:
- Offer: This is a promise in exchange for performance by another party. The other party can accept, revoke, terminate or make a counteroffer.
- Acceptance: This is the willingness of one party to enter into a contract by assenting to the terms and conditions set out by the offering party to make a binding contract. The agreement must have the signatures of both the buyer and seller. If the buyer makes a counteroffer, the initial contract is terminated and won’t be valid since the parties haven’t agreed on the terms. If the buyer rejects the offer or doesn’t respond, the contract is automatically terminated.
- Consideration: It’s what parties in a contract must agree to give up, making it legally binding. It can be in the form of money or a return promise.
- Legal capacity: The parties involved to enter into a legal agreement must not be mentally impaired or underage.
- Legal purpose: The object of a contract must be lawful when the contract is in action.
It’s hard to get all of the above if you have never been involved in home purchase or sale before. That is why you need to visit the CocoDoc website to see the samples in store for you. They are all free of charge, and all you need is to download the preferred one.
If you would like to edit it online, CocoDoc has that feature and includes the ability to sign electronically. As you peruse what the platform offers, here are the five types of home purchase agreements that you can leverage.
Types of Home Purchase Agreements
There are five major categories of home purchase agreements. They include the following:
It is a binding contractual agreement between the property buyer and property seller for property ownership transfer. When parties agree and have signed the purchase agreement, they are said to be “under contract.”
There are three types of purchase agreements, namely;
- State/ Association Purchase Agreement: This is an agreement between two parties, that is, the property seller and buyer, where a real estate agent is involved.
- General Purchase Agreement: This is an agreement where no real estate agent is involved.
- Property-Specific Purchase Agreement: This purchase agreement is used to buy properties that are not connected in the traditional single-family way.
This agreement binds the property owner (landlord) and the lessee (tenant) that states what the tenant will pay monthly. In addition, it outlines the roles and responsibilities of the landlord and the tenant.
The agreement also includes specific provisions such as payment of utilities, for instance, water, electricity, security deposit, and disposal of garbage fee. Tenants need to know that this agreement can be prone to adjustments before being signed.
Real Estate Assignment Contract
This is a wholesale strategy used to ease the sale of property between a property owner and buyer. This contract is initiated when the property owner decides to sell the rights to purchase the property to a said investor, and both parties sign a contractual agreement binding themselves to the deal.
A real estate investor is given rights to purchase a property by this contract, and they can then trade their rights to buy the said property to another buyer. A small assignment fee will be paid to the investor by the end buyer, who will then buy the property from the owner.
A real estate assignment contract does not give investors the lee-way to the property. This means one can flip real estate contracts and make a fortune from real estate deals without owning property.
There are instances where one may not enforce an assignment contract:
- If the agreement does not allow assignment: Some contracts will comewithan anti-assignment clause, which prohibits any assignment.
- If the property has restrictions: Some properties might have deed restrictions that prohibit their assignment of home purchase contracts within a specific time frame.
- If there is no written consent: Before a home assignment contract is enforced, parties involved must give written consent.
- If the assignment violates the law- Certain jurisdictions have specific laws that govern or limit assignments.
Power of Attorney
This type of contract is used in instances where a party is incapable of signing a contract. For example, this may happen when one is mentally unstable, hospitalized, aged, or not present in the country. In such a scenario, the principal will appoint an attorney and proceed to sign the purchase contract on their behalf.
Option Agreement Contract
An option agreement contract is an arrangement between two entities where the seller offers the purchaser an option to buy a specific property at a fixed amount within a specified period.
The potential buyer pays a non-refundable fee for the option agreement, and during the period of the option agreement, neither of the parties can sell nor buy the property. An option agreement contract, however, does not guarantee a sale.
This is a risk to the seller as they will be committing to a contract for several years. Therefore, they can’t sell the property to any other buyer without a guarantee of a sale at the end of the option period.
If you are planning on buying properties or undertake any home purchase transaction, chances are, you will have to sign a contract. There are different categories of contracts, and each of them serves particular purposes and conditions. So, it’s crucial to have a deeper understanding of these types of contracts if you’re planning on venturing into the real estate world. If you don’t know what a home purchase agreement should entail, CocoDoc has the templates to serve as a guideline.