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The Agreement of Sale
Forms
The buyer's agent will normally use a standard form of Agreement, developed by the Pennsylvania Association of Realtors* or their local Board of Realtors*. However, when purchasing new construction, the builder will usually require the buyer's offer to be presented on the builder's own, proprietary Agreement form.
It is critical that the Agreement contain all of the details included in the transaction. Not only will it serve as the "blueprint" for every aspect of the transaction, but all promises, representations and understandings must be spelled out in the Agreement in order to be binding and enforceable.
It will typically include such items as:
The Pennsylvania Association or Realtors* Agreement of Sale and most other commonly used forms incorporate the basic legal requirements and other details that should be included in an Agreement. The following items depend on the particular transaction:
Forms
The buyer's agent will normally use a standard form of Agreement, developed by the Pennsylvania Association of Realtors* or their local Board of Realtors*. However, when purchasing new construction, the builder will usually require the buyer's offer to be presented on the builder's own, proprietary Agreement form.
It is critical that the Agreement contain all of the details included in the transaction. Not only will it serve as the "blueprint" for every aspect of the transaction, but all promises, representations and understandings must be spelled out in the Agreement in order to be binding and enforceable.
It will typically include such items as:
- Financing contingency, i.e., specifics of mortgage loan requirements
- Inspection/testing contingencies
- Seller's obligation to provide clear title to the property
- Type of deed to be given, i.e., special warranty or general warranty
- Provisions for buyer to conduct a final walk-through inspection of the property
- Quality of title to be delivered
- Default provisions, and disposition of deposit monies in the event the Agreement is terminated
- Method for prorating real estate taxes and utility bills between the parties
- Any other understanding between the Parties
The Pennsylvania Association or Realtors* Agreement of Sale and most other commonly used forms incorporate the basic legal requirements and other details that should be included in an Agreement. The following items depend on the particular transaction:
- PartiesAll sellers and buyers should be listed.
- PropertySpecify the mailing address, township, county and tax parcel number or uniform parcel identifier number.
- PriceTiming of payment of the purchase price should be spelled out, including initial and follow-up deposit, and balance due at settlement. At the time the buyer submits the Agreement of Sale, an initial deposit or $500 to $1000 is given, to provide "consideration" and make any resulting Agreement legally binding. The balance of the deposit, typically between 5% to 10% of the purchase price (the so-called "earnest money") is then due within a few days of all Parties' acceptance of the Agreement. All deposit money becomes part of the buyer's down payment toward the purchase price and settlement costs. If the buyer's offer or seller's counter-offer is rejected, resulting in no Agreement being formed, any deposit money is returned to the buyer.
- Settlement DateAn "on or before" date should be specified, with time being of the essence. This means that the stated date is the actual settlement date, not just a projected or estimated date.
- Personal PropertyAll non-realty items not otherwise listed in the Agreement as "fixtures", but still intended to be included is the sale, should be listed in detail.
- Mortgage ContingencyThis provision specifies the buyer's mortgage loan requirements, and provides for the refund of the buyer's deposit money if the buyer is unable to obtain the specified financing.
- Inspections and Test ContingenciesThe Agreement should spell out any inspections and tests of the property that are to be completed to determine the condition of the structural elements of the home and all systems and equipment, as well as exterior conditions and any health/environmental concerns. The Agreement should be contingent upon satisfactory resolution of any issues identified in this process, within defined time limits.
- OtherDetail any other matter that the Parties intend to be part of the transaction.
For Buyers
Finding a Good Agent
Benefits of a Buyer's Agent
Preparing To Buy a Home
Getting Prepared To Buy A Home
First Time Buyers
Renting vs. Owning
How Much Do I Need
How Much Can I Afford?
Income vs. Debt Ratios
Understanding Your Credit Score
Examining Your Credit History
Getting Pre-Approved
Finding A Property
Are You Ready To Find A Property?
Visiting Open Homes
Using A Property Checklist
Other Considerations
Making an Offer
Establishing an Agreement
The Agreement of Sale
What You Need To Know
Negotiating
How Much Should I Offer?
Closing The Deal
Your Responsibilities
Property Information
The Loan Process
Closing Costs
Who Pays For What?
Finding a Good Agent
Benefits of a Buyer's Agent
Preparing To Buy a Home
Getting Prepared To Buy A Home
First Time Buyers
Renting vs. Owning
How Much Do I Need
How Much Can I Afford?
Income vs. Debt Ratios
Understanding Your Credit Score
Examining Your Credit History
Getting Pre-Approved
Finding A Property
Are You Ready To Find A Property?
Visiting Open Homes
Using A Property Checklist
Other Considerations
Making an Offer
Establishing an Agreement
The Agreement of Sale
What You Need To Know
Negotiating
How Much Should I Offer?
Closing The Deal
Your Responsibilities
Property Information
The Loan Process
Closing Costs
Who Pays For What?
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Fax: (814) 825-1798
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Pro Realty Inc. (814) 825-7761
Fax: (814) 825-1798
Email: pro@prorealty.com