Purchase Agreement Attorney Proudly Serving Livonia, Northville, and Plymouth
Drafting and Review of Real Estate Sale and Purchase Agreements
Buying a home is an important and memorable event, and for most of us is the largest transaction that we will be a part of. Home mortgages generally stretch out between 15 and 30 years and it is important to involve a real estate attorney prior to signing the purchasing agreement to ensure that you fully understand the transaction and are not potentially buying a problem that could stick with you for many years.
As any property owner can tell you, the property purchase is accompanied by reams of paperwork. Each document contains technical legal language about complex areas of the law. Without careful scrutiny of your residential real estate agreement, important clauses may be overlooked or excluded leaving you in an unfavorable position. If you are contemplating buying or selling property through a for sale by owner process or standard real estate agent/broker model, be sure to consult with an experienced Livonia real estate lawyer today. Your attorney can draft and review the agreement while prioritizing your interests.
What is a Purchase Agreement and Why is it Important?
The purchase agreement is a written agreement that sets forth the terms of the sale and purchase. It is one of the most important documents of every real-estate transaction and is the document that will, or at least should, dictate how the residential transaction is to unfold.
There is a common misconception that there exists a standard purchase agreement that properly protects all parties’ rights and cannot or should not be changed. This could not be further from the truth and each form should be carefully reviewed by an attorney and then tailored to best meet the needs of the client. These actions are commonly referred to as making a purchase agreement pro buyer or pro seller.
What are the Key Provisions and Negotiating Points?
While every purchase agreement and real-estate transaction is unique, there are common clauses that should be negotiated.
Personal Property: The purchase agreement should recite and list the items to be conveyed with the real estate.
Deed by Which the Land Will be Conveyed: Typically buyers or sellers in arm’s length deals should require a warranty deed. Family members may elect for a quitclaim deed but should be aware of the risks.
“Subject to” Clause: This is an important topic and can reduce headaches down the road when properly drafted to favor the client. Sellers will prefer a broad statement regarding use restriction and easements where a buyer will negotiate for limited terms.
Financing: The purchase agreement should be specific to the type of financing used to purchase the home. The most common purchase types are 1) cash, 2) mortgage, and 3) land contract.
Taxes, Assessment, and other Prorations: The purchase agreement should state who is responsible for the payment of real estate taxes and other standard prorations. Also, there are several proration methods that can be used to favor either the buyer or seller.
Condition of Title and Title Assurance: Buyers should always require a seller to provide evidence of the condition of the title, including all instruments that currently encumber the property.
Survey: A buyer should always require a survey to be completed. Typically, a good negotiating point is who will cover the expense of the survey.
Earnest Money Deposit: While there is no legal requirement that an Earnest Depot be made, it is a very common requirement. The amount typically found as 3% of the sale price can be negotiated.
Closing and Possession: The date of possession should be clearly established. Further the purchase agreement should state with certainty how possession is to be delivered. The post-closing occupancy period, if applicable to the transaction, should also be negotiated and clearly written into the agreement
Condition of the Property: The buyer and seller should align to a right to inspect time period prior to closing to ensure that the “as is” condition is met.
Other Common Contingencies:
Attorney Review Contingency
Sale of the Buyers Home Contingency
Time is valuable and instead of getting bogged down in a lengthy negotiation on each topic, consult with a knowledge Michigan real estate attorney who can help take care of these details for you. Your attorney can thoroughly explain your options, and help you make an informed decision.
What are the Required Disclosures for a Real-Estate Transaction?
In Michigan, the Michigan Sellers Disclosure Act, requires that a seller deliver the statutory Sellers Disclosure Statement form to a buyer prior to a purchase agreement being signed. If this does not occur a buyer is given an opportunity to cancel a purchase agreement before closing.
The Residential Lead Based Pain Hazard Reduction Act applies to all homes constructed before 1978. This requires certain written disclosures to be made to the buyer. It is also wise for a buyer to negotiate for the purchase agreement to be contingent on an inspection if there is concern that lead paint may exist.
There are also less common disclosures such as the property being location on a private road, risk of loss, and alternative dispute resolution.
Should I have an Attorney Review a Purchase Agreement Before Signing?
The short answer is yes. Purchase agreements are complex transaction, and an ounce of prevention is worth a pound of cure.
Matt Devitt Law, PLC is proud to offer fixed value-based pricing. With Fixed Fee Value Pricing the price is set before the work begins so that you know how much you can expect to pay ahead of time.
Proudly Serving Livonia, Northville, and Plymouth Areas
39111 Six Mile Rd
Livonia, Wayne County 48152