Speaker 1: This video will guide you through eight steps needed to write a purchase agreement for real estate. Real estate purchase and sale agreements are a widely requested project on the Contracts Council platform, given the number of real estate transactions that happen annually. Both buyers and sellers want to make sure they are protected, and need to have a solid contract in place to protect their rights. So, if you need to write a real estate purchase agreement, this video is for you. We will cover 1. Who uses real estate purchase agreements? 2. Key terms to include in your agreement 3. Eight steps to follow to write your purchase agreement Now, let's get started. Who uses real estate purchase agreements? Real estate purchase agreements are used by a variety of parties during real estate transactions, given there are typically multiple parties involved. 1. Buyers Individuals or businesses buying a property use these agreements to outline the terms and conditions of their purchase. 2. Sellers Individuals or businesses selling a property also use these agreements to define the conditions under which they will sell a property. 3. Real estate agents and brokers Agents often help with drafting, reviewing, or negotiating these agreements on behalf of their clients to ensure their interests are protected. 4. Lenders If a buyer is obtaining financing for the purchase of real estate, a lender may require to see the real estate purchase agreement to make sure the financing terms match the contract. 5. Title companies Title companies will often review the purchase agreement to understand the terms of the sale to make sure closing goes smoothly. 6. Real estate lawyers Real estate lawyers often work with these documents on behalf of their clients to make sure their interests are protected. 7. Escrow agents Escrow agents are neutral third parties that hold funds and will need to review the terms of the contract to make sure they satisfy their obligations. What to include in your purchase agreement There are common terms used in real estate purchase agreements. Here are some you will find. 1. Names of the parties Clearly identify the seller, who is the property owner, and the buyer, who will be acquiring the property. 2. Purchase price This section states the agreed-upon purchase price of the property. 3. Earnest money deposit This describes the amount of money needed upfront by the buyer, where it is held, and the terms under which it can be returned if forfeited. 4. Description of the property This states the address of the property, as well as any other identifiers. 5. Inspection period Specify a duration during which the buyer or their representatives can inspect the property. 6. Contingencies These are specific conditions that must be met before the sale can be finalized. Common contingencies include property inspections, mortgage loan approval, and the sale of the buyer's current home. 7. Title This section addresses the legal documents that prove ownership of the property. 8. Financing Describes the terms under which the buyer will be financing the purchase. 9. Closing date and costs This section specifies when the transaction will be finalized and who will pay for closing costs. 10. Default terms Specify what happens if either party does not fulfill their obligations as stated in the contract. 11. Dispute resolution and governing laws This outlines the procedure on how the parties can handle a dispute and what state laws will be used to interpret the contract. 8 steps to writing a real estate purchase contract Here is a list of 8 steps you can follow to draft your purchase contract. 1. Review commonly used clauses Review the commonly used clauses discussed earlier in this video or find a template online to use as a reference. This will allow you to know what to include. 2. Identify transaction information Next, identify the key information you want to include in your agreement. This may include details about property, purchase price, inspection period, and contingencies. 3. Use clear language It is critical to use clear and concise language that all parties understand. 4. Organize content Once you've written your clauses, organize them so that they are logical. For example, you likely want to have the details about the property come before your closing date section. 5. Include local laws Be sure to incorporate any local laws that may be specific to your state, since laws regarding real estate transactions may vary from state to state. Note, this may require research. 6. Consider seeking legal advice If you are unsure about anything, consider using Contracts Council's platform to seek advice from an experienced real estate lawyer. 7. Review and revise Review and revise the clauses to make the language clearer and confirm you have included everything needed. 8. Make accessible Create a single document to serve as your contract and provide it to the other party. In conclusion, drafting a solid purchase contract is key to a successful real estate transaction. If you need help from an experienced lawyer, feel free to visit www.contractscouncil.com and post a job to get quotes from lawyers to help you. Thanks for watching.