Real Estate Word of the Day – Learning Real Estate one word at a time…
Agreement of Sale
An Agreement of Sale is a legal document that outlines the terms and conditions between a buyer and a seller for the sale of a property or goods.
The agreement typically includes details about the property or goods, the purchase price, payment terms, conditions of sale, and any other relevant information. Here are some key elements commonly found in an Agreement of Sale:
Parties involved: Clearly identify the buyer and seller by their legal names and addresses.
Description of the property or goods: Provide a detailed description of the property or goods being sold. For real estate, this may include the address, size, and any relevant details. For goods, it may include specifications or model numbers.
Purchase price: Specify the agreed-upon purchase price for the property or goods. This section may also include details about any earnest money or deposit paid by the buyer.
Payment terms: Outline how and when the buyer will make payments, including details about any financing arrangements if applicable.
Conditions of sale: Include any conditions that must be met for the sale to proceed, such as inspections, repairs, or obtaining financing.
Closing date: Specify the date on which the sale will be finalized, and ownership or possession will transfer from the seller to the buyer.
Default and remedies: Outline the consequences if either party fails to fulfill their obligations under the agreement. This may include termination of the agreement, forfeiture of earnest money, or legal action.
Contingencies: Include any specific conditions that must be met for the sale to proceed, such as the buyer obtaining financing or the seller completing repairs.
Representation and warranties: Define any guarantees or assurances made by either party regarding the condition of the property or goods.
Closing costs: Specify how closing costs will be allocated between the buyer and seller.
Signatures: Both parties should sign the agreement to indicate their acceptance and agreement to the terms outlined.
It’s important to note that real estate transactions may require additional documentation, such as property disclosures and title reports. Legal advice or assistance from a professional may be advisable when drafting or reviewing an Agreement of Sale.
In a few states, an agreement of sale refers to a land sale contract or contract for deed.
A land sale contract, also known as a land contract or contract for deed, is a legal document that outlines the terms and conditions for the sale of a piece of land between a buyer and a seller. This type of contract is often used when the buyer may not be able to secure traditional financing through a mortgage lender and involves the transfer of equitable title, with transfer of legal title taking place when the terms of the land sale contract are met or completed.