Purchase and Sales Agreements
When buying a house, commercial property or other real estate, a purchase and sale agreement will be used. So what is this agreement?
It is a written contract that, once signed by both the buyer and the seller, creates an obligation for seller to sell the property and the buyer to purchase the property at an agreed upon price subject to any terms and conditions stated therein.
Purchase and sale agreements can differ greatly depending on the property being sold. For example, a description of the property to be purchased can be as simple as identifying the address, however in certain circumstances it is beneficial to provide a full legal description. It is important for a buyer to inspect the property in order to discover any problems or defects. Any inspection contingencies must be included in the purchase and sale agreement. Many purchase and sale agreements will also contain additional terms and phrases such as:
- Closing date
- Earnest money or deposit amounts
- Details about inspections, surveys and marketable title
- Financing contingency clauses
- Tenants, rents and security deposits in the case of rental or commercial property
In New Hampshire, certain things must be disclosed to the buyer, by the seller, regarding the home or property at the time of the purchase and sale agreement.
- Radon Gas – Radon, the product of decay of radioactive materials in rock, may be found in some areas of New Hampshire. Testing of the air by a professional certified in radon testing and testing of the water by an accredited laboratory can establish radon’s presence and equipment is available to remove it from the air or water.
- Arsenic – Arsenic is a common groundwater contaminant in New Hampshire that occurs at unhealthy levels in well water in many areas of the state. Tests are available to determine whether arsenic is present at unsafe levels, and equipment is available to remove it from water.
- Lead Paint – Before 1978, paint containing lead may have been used in structures. Exposure to lead from the presence of flaking, chalking, chipping lead paint or lead paint dust from friction surfaces, or from the disturbance of intact surfaces containing lead paint through unsafe renovation, repair or painting practices, or from soils in close proximity to the building, can present a serious health hazard. Tests are available to determine whether lead is present in paint or drinking water.
- Water Supply– Information relative to the type of water supply system, its location, malfunctions, date of installation, date of most recent water test and whether or not the seller has experienced a problem such as an unsatisfactory water test or a water test with notations.
- Sewage– Information relative to the sewage disposal system including the type, size of tank, its location, malfunctions, the date it was most recently serviced and the name of the contractor who services the system.
- Insulation– Information relative to the insulation, including type and location.
- Methamphetamine – Information relative to any methamphetamine production.
- Metered Public Utility Services – If the service is provided under a tariff with unamortized or ongoing charges for energy efficiency or renewable energy improvements.
There are additional disclosure requirements if the property being sold is a condominium. The seller must inform the buyer that they have the right to obtain information from the condominium unit owners’ association including receiving copies of the condominium declaration, by-laws, any formal rules of the association, a statement of the amount of monthly and annual fees, and any special assessments made within the last three (3) years. There are also special disclosure requirements if the property being sold is waterfront property.
Disclosures may be attached as an addendum to the purchase and sale agreement or incorporated into a purchase and sale agreement.
After the purchase and sale agreement signed by the buyer and seller, and all terms and conditions have been satisfied a closing will be scheduled by the closing attorney or title company. If the buyer is financing the purchase of the property, loan documents as well the deed and a settlement statement will be prepared. Once the deed is signed and the monies given to the seller, then it is considered that all the the terms of the purchase and sales agreement have been satisfied and it is generally no longer in effect. The deed is then recorded at the registry of deeds so that the new ownership is then a matter of public record.
Whether you are buying or selling real estate, the experienced attorneys Smith-Weiss Shepard Kanakis & Spony, P.C. can assist you in preparing and/or negotiating a purchase and agreement and all other necessary documents to ensure your investment is protected and you obtain title to your new property as effortlessly as possible.