Speaker 1: Thanks for checking out my video. Today I'm going to walk you through how to fill out an Indiana State Purchase Agreement. I've got it loaded up in dot loop here. Before we go any further, I do have to give you a disclaimer. This is the way that I fill it out, not necessarily the way that it has to be filled out or the only way that it could be filled out. These are just the common practices that I use here to fill out our purchase agreements. So if you have any questions about that, please make sure that you check with your local leadership and your broker about what they prefer or what they like. So onward we go. So listing broker, you're starting at the very, very top. We'll put in here Keller Williams by Spencer Childers Group. I don't ever put this code. This is my code there, but I don't ever usually do that. And then you put, you know, let's say the buyer's agent is a Keller Williams agent because well, why not? And then their name is John Smith. So we put John Smith's name in there. I don't go look for his code either. You just kind of leave that blank. The date you can put today. The buyer's name can be Brian Smith. I don't know why all the Smiths are coming to me today, but they are. Property address you could put in there, 123 Main Street. The township you'll fill out. I'm just going to use a township we have here locally. I'll use my local county. And I will use my local city and a local zip code. The legal description, I typically pull this off a county website. It's going to look, it could look a lot of different ways, but most often they're going to look like Southridge Commons, subdivision, lot 45, you know, it's going to look something like that. And that's what you would copy and paste in there. If you're using Beacon, which is what I use a lot, you can copy and paste it right out of there. That's the best thing to do. You noticed I went up here and saved. I always save my work, like no matter when you put stuff in or if you even click a different button, just make sure you save first because it can delete it out of there and nothing's more annoying than when you have to restart this. So working through this next paragraph, which would be line 11 through 16, these are all the things that are going to stay with the house. So that would be, you know, built-in kitchen equipment like a dishwasher, water softener, purifier, fireplace, shades, window treatments, curtains, all that kind of stuff. It's important that if you want to, even though it's in here in the boiler plate, we'll say if it's something specific that your buyer really wants, like sometimes a buyer will really want a particular chandelier that's in a property, you would want to just to be safe list that here on line 17. So on line 17, you're going to list anything that you want to stay appliance wise. It's like refrigerator, range, washer, dryer, microwave. I know the microwave is built-in so you technically don't have to put it, but I think it's good if you do. Same with the dishwasher, I always list the softener on here too, just to be safe. And then let's say that there's something else that you wanted, like a play set or a hot tub. You could put those things on there as well and this is where they would go. Click save and it populates it for you. Excludes the following. So line 20 would be anything where you feel like your buyer doesn't want it, purposely does not want it there, or you know that the seller wants to take it. So let's say the seller loves their refrigerator and they're absolutely taking that refrigerator. They're not selling a house with one. It would be safe to put it in there just so your buyer is aware that the refrigerator is not included in the property. Next thing I fill out is price, line 28. So you would type in there whatever price you want. We'll put in here $400,000, it auto-populates $400,000. Next is earnest money. In our area it's customary to use 1% for earnest money. So that would be $4,000 in this case. Please check with your local leadership and local broker to see what you should put there. But regardless, whatever earnest money the buyer is willing to submit is what goes there. And here as you kind of look down, you're going to put how fast the buyer is going to submit that earnest money to the broker, whether you're going to hold it as the listing broker or the buying broker, or if the listing broker is going to hold it. So common in our area is to put in here two days. You can click days, you can take the days out of there, whatever you want. And then which broker is going to hold it, common for us is listing broker. This talks about disbursement of the earnest money. Read through that just so you understand what's there. And I'm just going to put that as disclaimer for the whole thing. Really in best practice should read through this purchase agreement no less than five to 10 times before you ever write one, just so you understand what is in there. It's definitely kind of wordy to get through it. Take your time and just read through it five to 10 times. So next page, method of payment. This talks about what your buyer's going to do. So if they're going to buy it in cash, great, you would click cash. And when are you going to provide proof of funds for the property? Are you providing them with the offer, or if not, within how many days are you going to provide it? So let's say in this case, we're going to provide it within two days. And then the next thing would be when or is your buyer going to do an appraisal based on the cash offer? A lot of times with cash, most buyers are not going to expect to have an appraisal done. Sometimes you will find the buyer still want an appraisal. The appraisal does not affect anything with the cash buy. So let's say that your buyer agrees to buy a property for $400,000 and an appraisal comes in at $380,000, just because they wanted an appraisal does not change anything with the purchase agreement. It's really just a fact for them. It's not contingent on the appraisal, if that makes sense, unless you exclusively write it that way. So let's back up just a little bit here. And let's say that your buyer's not doing cash. Let's say that they're going to do a new mortgage. They're going to do a conventional mortgage. Ensure conventional, you could do FHA, VA, select the appropriate box. Other here, a lot of times we'll see you click that and you'll put like USDA is a very common one there. You would type in here how much money they're getting the loan for, not how much they're putting down, but how much they're getting the loan for. So if they're putting 5% down, they're getting a loan for 95% of the purchase price, not payable, more often than not, it's going to be within 30 years, and their original interest rate not to exceed 7% right now, and then not to exceed points. So is this saying that they have to buy points or that they won't buy points? So let's say that they're only willing to buy one point. So let's say they're doing the conventional, they're putting 5% down, payable not less than 30 years, interest rate not to exceed 7%. This box did not typically used to be filled out, I guess I could say that it didn't really matter as much when this was filled out three or four years ago when rates were just bottom of the barrel. It didn't matter. They were always going to be low. Right now, interest rates are increasing or they have been increasing, so it's important that you put this in there to protect your buyer because what this means is that the contract is contingent upon the buyer getting a loan at 7% and only paying one point on a 30 year mortgage, and if they can't, then they can get out of this contract. Now sometimes with that, you're going to ask for, right now it will be a seller to pay like a 2-1 rate buy down, which I'll make in another video, or you will see that your buyer just needs help with closing costs. You would put in here seller to pay $5,000 towards buyer's closing cost and prepaids. What that means is that the seller will credit the buyer on the settlement statement $5,000 towards the buyer's closing cost and prepaids. Prepaids would be like your first year's worth of homeowner's insurance that the buyer has to pay, any tax prorations and insurance prorations that they need to put to start an escrow account with the bank, anything like that, they can use the $5,000 all they want. In this box here, you would mark it if you are going to Line 69, if you're going to be using down payment assistance or not, that the buyer is. Time for obtaining financing, so application, usually we put within seven days here that the buyer needs to get with the lender and start application for the house and then approval. You want this approval date here on Line 80 to match or be very close to this closing date. Let's say we're going to pick the closing date first, we're going to go out 30 days, so February 28th. There we go. Then we would want the bank to have their approval within 30 days of this agreement, which means that we're going to be okay to close in time on the 28th. There we have the fee, Line 90, the settlement fee that we typically put will be shared equally. Depending on the title company you're using, that's going to cost somewhere between $450 to $500, but you're going to want to put on there shared equally unless your buyer really wants to pay for it or if your buyer is struggling with funds, maybe you ask the seller to pay for that entire thing. Contingency, so this will be in this case the buyer is not contingent upon closing another property. Check out my other videos. I did one here on the contingency and all these other addendums, so look for that. This talks about good funds and that they have to wire the money to the title company if it's over $10,000. They can't just write a check or bring paper cash. Possession, so Line 112, typically we put in our area that the buyer will get possession at closing. You can do different things with this, so you could put that the buyer will not get possession at closing, that they'll get it within five days, seven days, a week, a month. I've seen all kinds of things. More often than not though, the buyer is going to want possession at closing, so that means the day that they sign the documents, the seller needs to have already been out of the house. The buyer gets the keys. The buyer can move in that day. If not, these boxes are really just to specify when the buyer would get the possession. Then if the seller needed to pay any money, the seller shall pay the buyer. You could put in here $150 that the seller would have to pay the buyer in the event that the seller does not deliver possession. Same kind of thing here, 150. Maintenance of the property, so that means really whoever is possessing the property, if the seller has post-possession, that the seller's in charge of maintenance of the property and that they must remove all debris and personal property not included in the sale. Property loss, read through that on your own. Home heating fuel, you'll see this, line 130, you'll see this, and regards a lot to like an LP tank. I think it's always best and way less messy if you just put any LP that's left in that tank is going to be included in the sale instead of doing this other option here, which would be it will be purchased by the buyer at current market price measured within five days prior to the closing. Just make it included in the sale to save yourself a headache. Also what you can do with that is let's say that the seller feels like there's $2,000 worth of fuel left in that LP tank, that's totally fine. Just raise the house price by $2,000 to accommodate that and check this box here and that way it's easier for everybody. Property survey, line 135, we typically checked that it's waived. From there, you can put in here that it's shared equally if the lender requires it. We've done at this point of making this video, we've done a little over 800 sales since I've been a real estate agent. I've never had a lender require it, knock on wood, I hope they never do. In the event that they do, you can mark shared equally or if your buyer really wants a survey, they can have a location report done where the corner markers are not set or they can have a boundary survey where they come out and they'll put the stakes on the different property markers, the corners, to show the buyer where the property is. This process, if your buyer does elect to do that, it does take time, they are very backed up. At times, it can take three to six months to get a surveyor out there to mark those, so it's not very common that something like that happens. Flood area, line 142, I do think it's really good that you always put in here that the buyer may terminate the agreement if the property requires flood insurance. Flood insurance, depending on where the property is, can be very cheap. I've seen as high as $6,000, $7,000 a year, which really could affect your buyer's payment if extra $500 a month is going towards a flood area. It's always good to check May, and that way if you guys find out through the middle of the transaction that it's going to require flood insurance, then you're protected and your buyer's protected and you can walk away and keep the earnest money. Building use limitations, so the buyer, if they're going to buy it for a single family and they're going to live there, great, you check that box. If they're going to be buying it for really any other purpose, a flip, a rental, anything like that, then they have ... You check the other box and you could put in here like investment or rental, anything like that. Let's say this next line here is really going to be ... If the buyer, let's say they're buying a property and they want to know if they can have cows on the property, then the buyer should have ... In this case, you can put 10 days for exception of purchasing, and then you're going to list on here buyer wants cows. You're going to put on there what the buyer, what the limitation they're looking to have there. Homeowner's insurance, typically we put 14 days on this, so that would mean that the buyer has 14 days to go find an insurance policy that they're in acceptance with. Read through the environmental contaminants on your own.