Purchase agreements are a legally binding contract between the seller of a property and the buyer who wants to make it their own. While many people involved in New York real estate transactions think that purchase agreements simply include an offered price for a property and the seller’s decision to accept it, purchase agreements have many components.
One of the most important aspects of a purchase agreement is the information about how the buyer will pay for the subject property. Unless the buyer is paying cash, he or she will need to obtain a loan from a mortgage institution. There should be details about the method by which the buyer will obtain financing for the property in the purchase agreement.
Good faith deposit
Also referred to as an earnest money deposit, good faith deposits are a way for a seller to show that he or she is serious about purchasing the subject property. Since sellers don’t want to lose potential buyers while the property goes through the lengthy purchase process, an earnest money deposit provides peace of mind for both sides that they will not lose the deal. Should the buyer decide to back out for an invalid reason, the seller typically gets to keep the earnest money deposit.
Both buyers and sellers have the option to put different types of contingencies in the purchase agreement. Legally speaking, contingencies are conditions that both parties can implement in the contract to ensure that they are satisfied with the final closing. Either party can incorporate different contingencies into the purchase agreement to protect their own interests.
There are more elements to a purchase agreement that your real estate attorney may better explain. Real estate transactions are primarily legal in nature and should always involve the help of a lawyer.