Are you in the market for commercial real estate? Whether you’re buying or selling commercial property in Pennsylvania, there are many elements that constitute the process, including the sales agreement.
What is a real estate agreement, and what are the laws and regulations surrounding them in Pennsylvania? If you need help understanding and creating your own Pennsylvania real estate agreement, Hoegen & Associates, P.C. is here to help. Read on to learn more.
What Is a Real Estate Sales Agreement?
A real estate sales agreement is a binding contract between two parties, authorizing the transfer of a property. This contract essentially validates the legality of a real estate purchase in writing. Without this contract, the purchase is invalid.
The contract goes into effect when both parties agree and sign it, communicating their acceptance of the agreement. Verbal acceptance of a real estate sales agreement can oftentimes be unreliable. In Pennsylvania, parties must acknowledge their acceptance in writing to safeguard against these uncertainties.
A statute of frauds is in place on all real estate sales in Pennsylvania, requiring acceptance of both parties in some form of writing. This holds both parties accountable to the provisions set forth in the written acceptance. This writing does not need to constitute an entire contract, but it should include a signed set of agreements acknowledging the sale and the responsibilities of both parties. It’s recommended that an Agreement of Sale is subsequently created and signed.
Good Faith Deposit
Once a real estate agreement goes into effect, the buyer will normally put down an earnest money deposit. This is otherwise known as a good faith deposit. This deposit can communicate and demonstrate the buyer’s acceptance of the agreement. It allows the seller to take the property off the market. Again, it’s recommended that an Agreement of Sale is created and signed to prevent mismanagement of this deposit money.
How the Agreement of Sale Works
An Agreement of Sale is a contract that contains the initial offer, any counteroffers, the acceptance, terms and conditions of the sale, obligations of the parties, and ultimately, the price and amount of money exchanged for the property. It also includes the earnest money deposit and any appliances (refrigerators, washers, dryers, etc.) included in the sale. The contract should also indicate a deadline on the offer, as well as a target closing date.
For a contract to be valid, all parties signing must have the legal capacity to do so. The agreement also details who is responsible for paying the home inspection and obtaining title insurance. In the case of one party backing out of the agreement, this contract ensures that the other parties can still enforce the contingencies and conditions before the sale goes through.
There are many benefits to hiring a real estate lawyer to help throughout the agreement process. A real estate attorney can conduct a title search of the property, as well as negotiate the offer, sales agreement, and any disputes.
By law, a Pennsylvania real estate sales agreement must provide a description of the property and any identifiable damage. Sellers must disclose any structural defects or problems tied into the property. This is to ensure buyers sign and agree to the sale with a full understanding of the property’s condition.
Property defects can include problems to the foundation of a home, including the walls, roof, and basement, or problems with appliances included in the sale. This also includes defects in the electrical or plumbing system. Any hazards must also be disclosed, such as asbestos, lead paint, or contaminated water.
Your Pennsylvania Real Estate Sales Agreement
Are you buying or selling commercial property in Pennsylvania? The attorneys at Hoegen & Associates, P.C. help you make informed decisions when it comes to signing your real estate sales agreement. Contact us today to speak to a real estate attorney.