Anyone who has bought or sold a house in New Jersey knows that real estate contracts are incredibly complex. One of the most important contracts you will encounter as part of your real estate transaction is a purchase agreement.
What is a purchase agreement?
A purchase agreement is a contract between the buyer and the seller that states the detailed terms of the sale process. Both parties typically have various requirements that must be met by certain deadlines before the sale can be completed.
It is extremely important to follow the terms of your purchase agreement, whether you are the buyer or the seller. Missing your deadlines or not performing your duties under the agreement could not only cost you a lot of money but it could also result in the sale not going through.
Read and understand all terms
Therefore, do not sign your purchase agreement until you have read through all terms and conditions and understand them. It is usually best to do this with the help of a real estate attorney, since you might have questions about what certain things mean.
You are allowed to make changes to the purchase agreement. Being afraid to speak up about something you are unsure of or don’t like is understandable.
If you are the buyer, you may worry that asking for changes could mean losing your chance to buy your dream home, while as the seller, you may be anxious that changing any terms could mean losing out on the profits of a sale. The reality is that both parties can and should voice any concerns.
The importance of contingency language
Direct and open communication can result in modified language that is still in both of your best interests. You could include contingency language, meaning that everyone agrees the sale will not happen if certain things occur.
Common contingency language involves home inspections or the ability to secure a mortgage. For example, if an inspection of the home reveals major problems that no one knew about or planned for, your purchase agreement can state that the sale can be cancelled with no penalties.
Buying or selling a home should be an exciting time, as both parties move on to new chapters in their lives. A well-written purchase agreement can increase the chance of a smooth transition.