An agreement of sale is a document that includes information about the buyer and seller of a property. In a good agreement, it will give details on the property and other vital information that may be needed by the buyer, seller, attorney or others involved.
Pennsylvania state law dictates what to include in an agreement of sale. The items you need to have in this document include:
- The sale price of the property
- The names of the seller and buyer
- The type of warranty of title on the deed
- The dates for payment and conveyance
- A description of the property
- A description of the interest being transferred
- The property’s zoning classification (with exceptions)
- Details about the escrow account used to hold the deposit, if any
- A statement that identifies the broker(s) and the services they provide
- Details of inspections to be done and time periods for those inspections
- Specific statements as required by the state
An agreement of sale may differ depending on the kind of property that is being purchased. Commercial properties, residential one to four-unit properties, and vacant land all require different forms to start with, and different seller disclosures. Pennsylvania real estate agents and brokers have developed a full set of forms through the Pennsylvania Association of Realtors (PAR) which are used on most transactions when brokers are involved. In our office, we have developed forms for agreements of sale to be used when buying and selling different types of PA real estate without a real estate agent or broker. We can help you to review the forms being used by real estate agents and brokers for simple, flat rates, or can help you to draft the right forms when no broker is involved.
Different types of purchases also have different forms and considerations. For timeshare or campground memberships, purchasers have up to five days to cancel the purchase. This has to be included in the agreement of sale. For new construction agreements, many more details of the home or building construction need to be carefully reviewed, as well as builder warranties and the right of the buyer to cancel and get deposits back if financial circumstances change during construction. The agreement of sale for a transaction with a mortgage contingency also has to state:
- The term of the mortgage
- The maximum interest rate
- The principal amount finances
- The type of mortgage used
- A deadline by which the buyer has to obtain a mortgage
- The type of assistance a broker will offer when finding a mortgage
There are other essential parts of this document, too, which is why it’s a good idea to talk to your real estate attorney about the purchase you’d like to make and having an agreement of sale drafted. They will know the specific requirements set by the state of Pennsylvania, so that the agreement is specific to the property you want to purchase or sell and falls within the guidelines of the law.
Since every transaction is different, it is important to have someone review the agreement and make sure all details are accurate. Everything from the zoning statement to the sale price of the property must be accurate for the sale to be legal between the buyer and seller.