I dont understand the purchase agreement and how it should be filled out. Is this a good one to use as far as having an out clause?
CONTRACT FOR THE PURCHASE & SALE OF
REAL ESTATE
Date: On this day of, 2013
PARTIES: This agreement is made between Seller(s): ___________________________________________________ and Buyer(s): _______________________________________________ and or assigns, as Buyer. Seller agrees to sell and buyer agrees to purchase subject property listed below.
WITNESSETH: That Seller, in consideration of the payments, covenants, agreements and conditions herein contained which on the part of the Buyer are to be made, done and performed, has this day sold, upon the conditions hereinafter recited, to the Buyer the real property legally described as:
SUBJECT PROPERTY: ________________________________________________________, hereinafter the property.
LEGAL DESCRIPTION:_______________________________________________________________________
_________________________________________________________________________________________________
SALE PRICE: $________________________
SUBJECT TO: _________________________________________________ $________________________
EQUITY: $________________________
PAYABLE:THIS IS AN ALL CASH TRANSACTION. PURCHASE PRICE IS NET.
EXISTING MORTGAGE (S):Existing financing on subject property will be current in all payments of principal, interest, late charges and escrow amounts required by the mortgagee. Escrow balance has been calculated into the price and will transfer to the Buyer along with title. Buyer will take title subject to his debt.
EXPENSES:BUYER PAYS ALL CLOSING COSTS.
INSURANCE:As consideration for this purchase the Seller will assign all insurance policies on the property to the Buyer and Seller will grant a limited power of attorney to the Buyer to deal with the lender(s) and insurance provider(s).
RISK OF LOSS:If subject property is damaged prior to transfer of title, Buyer has the option of accepting any insurance proceeds with title to the property in “as is” condition or of canceling this contract and accepting the return of the deposit.
PRORATIONS:Real property taxes will be prorated based on the current year’s tax without allowance for discounts, including homestead or other exemptions. Rents will be current and be prorated as of the date title transfers.
FINANCING: This purchase is subject to the Buyer and Buyers’ Partner ability to secure the necessary financing.
DEFECTS:Seller warrants subject property to be free from hazardous substances and from violation of any zoning, environmental, building, health or other governmental codes or ordinances. Seller further warrants that there is no material or other known defects or facts regarding this property, which would adversely affect the value of said property.
ASSIGNABLE CONTRACT: BUYER MAY ASSIGN CONTRACT IF FINANCING CANNOT BE SECURED.
NO JUDGMENTS:Seller warrants that there are no judgments threatening the equity in subject property, and that there is no bankruptcy pending or contemplated by any titleholder. Seller will not further encumber the property and an affidavit may be recorded at Buyer’s expense putting the public on notice that the closing of this contract will extinguish liens and encumbrances hereafter recorded.
RADON GAS & LEAD PAINT: Lead based paint and Radon, a naturally occurring radioactive gas that may present health risks to persons who are exposed to it over time, may exist in this property. Buyer may obtain a risk assessment of “the property” by licensed inspectors. Dangerous circumstances and the conditions, which caused said circumstances would be corrected at the Seller’s expense before title transfers.
LICENSURE: The trustee of the above-mentioned Buyer’s Trust may or may not hold an inactive real estate license.
POSSESSION: Possession of the property and occupancy (tenants excepted), with all keys and garage door openers, will be delivered to the Buyer when title transfers. Leases and security deposit will transfer to the Buyer with title.
INSPECTIONS: This contract is contingent upon the Buyer’s and Buyers’ Partner inspection and approval of the property prior to transfer of title. Seller agrees to provide access to the Buyer’s representatives prior to transfer of title for inspection, repairs and to market the property. Inspection must pass Buyer and Buyers’ Partners Inspection Process.
ACCEPTANCE: This instrument will become a binding contract when accepted by the Seller and signed by both Buyer and Seller. If it is not accepted and signed by the Seller prior to _________________, this contract shall be void.
DEPOSIT: Upon acceptance Buyer will place in escrow an earnest money deposit of $ ____________ with title company which will be part of the cash paid to the Seller when title transfers. This deposit will be returned to the Buyer if title does not transfer in accordance with this agreement and said Title Company will close this transaction.
CLOSING: Closing will take place on or before: _____________ at ______________________________________or TBD, Subject to a 45-day period in which the buyer/seller shall be permitted to do necessary due diligence and to clear any title problems.
OTHER AGREEMENTS: Seller agrees to provide (1) set of keys and allows 24hr access to the property for inspecting subject property and to perform proper due diligence until sale is completed if available. THIS IS A CASH TRANSACTION. BUYER PAYS ALL CLOSING COSTS. PURCHASE PRICE IS NET.
TIME IS OF THE ESSENCE WITH THIS AGREEMENT. EACH CONTINGENCY CONTAINED HEREIN SHALL BE SATISFIED ACCORDING TO ITS TERMS BY THE CLOSING DATE OR THIS CONTRACT EXTENDS TO PROVIDE TIME FOR SATISFACTION OF SAID CONTINGENCIES. EACH PARTY SHALL DILIGENTLY PURSUE THE COMPLETION OF THIS TRANSACTION. EACH WARRANTY HEREIN MADE SURVIVES THE CLOSING OF THIS TRANSACTION.
PROHIBITION: This agreement establishes a prohibition against transfer, conveyance or encumbrance to the property.
____________________________ _______ _____________________________ ______
Seller Date Buyer Date
_______________________________ ________ _________________________________ _______
Seller Date Buyer Date
