A real estate sales agreement must be in writing to be enforceable.
A residential sales agreement governs the sale of residential real estate. It is different from an agreement to sell most types of personal property, because the sale will not be complete until the seller transfers the title deed to the buyer. Since real estate is of higher value than most other kinds of property, a residential sales agreement should be drafted carefully.
Preliminary Matters
Identify the parties to the agreement by name in the preamble, and state the purpose of the agreement. Identify the property to be sold. A street address is not specific enough to identify the property --- go to the county land records office, find out how the property is described by the county government and use that description in the agreement. The county government will most likely describe the property using a plat number.
Earnest Money
Earnest money is a deposit presented by the buyer that he will forfeit if he signs the contract but does not proceed to purchase the property. It is usually deposited with a third-party escrow agent, who will release it to the buyer or seller according to the terms of the escrow agreement. State the amount of the earnest money, the name of the escrow agent and the terms of the release of the money.
Purchase Price
State the total purchase price, including the amount of any down payment and the amount financed. If the purchase is being financed by a third party, briefly describe financing arrangements. If financing has not already been confirmed, the buyer often demands the right to back out of the deal, with return of the earnest money, if financing arrangements fall through. If the seller is financing the sale of the property, as in a land contract, list the interest rates along with the amounts and due dates of installment payments.
Seller Warranties
The seller typically warrants that he will deliver marketable title to the seller on the closing date and that he will pay any expenses arising from the property, such as property taxes, until the closing date.
Closing Date
The closing date is the date upon which the buyer tenders the purchase price, often in the form of a certified check, and the seller transfers the title deed to the buyer's name. The agreement should require attorneys representing each party to appear at closing, as this is required by law in many states. Under a land contract, the closing does not occur until the buyer completes all installment payments.
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