A P&S, as it’s called, is a legal document that is put together and agreed to by attorneys. These attorneys represent both sellers and buyers in any real estate transaction. Depending on where you live, the P&S must be signed by both a seller and a buyer once both sides have come to an agreement. A real estate attorney will be primarily responsible for drafting your purchase and sale agreement.
What It Covers
The P&S includes the final sale price for the property as well as all terms of purchases. It will also entail the weeks between when the property was taken off the market and closing. You should also note that some conditions extend beyond the closing date, so pay attention to that in your agreement.
When is It Signed?
Your purchase and sale agreement will be signed after all contingencies of the sale are finalized. This would include your inspections and financing details that have been written into your deal. Important to note, your financing isn’t secured until after your P&S is signed.
What You Should Prepare Before Signing
If you’re a buyer, you should have your cash deposit on hand. In most cases, you’ll want at least enough for your ‘earnest money’ which is around $1,000. You’ll also need about 5 to 10 percent ready to go at the signing of your purchase and sale agreement. This money will also be applied to the purchase price if the sale goes through.
What You Need to Know About Your Purchase and Sale Agreement
First, the aforementioned initial cash deposit you’ll need for the agreement is very rarely refundable. This is part of the reason why you should be sure and confirm with your real estate agent, that you are definitely wanting to go through with the purchase before you sign the agreement. Of course, there is one exception to this rule, if a buyer has a financing contingency that fails to secure a mortgage. In this case, the money can be returned to the buyer—only if all the terms and conditions have been met by the buyer.
Second, if you are a seller, you can celebrate only after the P&S is signed. This is because it binds the buyer to the property and the purchase. If they fail to obtain financing the deal won’t go through, but if the buyer is paying cash, there’s no need to worry.
For more information about purchase and sale agreements, where a real estate attorney can help, and what questions to ask your real estate agent, contact us and we’ll happily answer your questions.