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What is an example of a purchase and sale agreement?

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Quick Answer

A purchase and sale agreement is a legal document signed by a buyer and seller after they agree on an offer. They are found in all types of businesses but are most commonly associated with real estate.

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Full Answer

The buyer should review the agreement critically before signing because it is binding in court. He signs it after all contingencies, such as a house inspection, have been completed.

A buyer usually makes a cash deposit during the signing of the agreement; he should therefore be sure that he intends to buy the house before signing the agreement because the deposit is typically non-refundable.

The final sale price is the purchase price the buyer and seller agree upon. The price might change during negotiations; for instance, a buyer might negotiate for a reduced purchase price if he notices a problem during the home inspection.

Closing date is the date when the sale parties close the deal, the transfer of the property is recorded with the local government and the seller receives the full payment for the home.

Contingencies are conditions that the sale parties set for the sale agreement to succeed. If one of these contingencies is not met, the buyer or the seller can terminate the sale. An example of a contingency is a home inspection, which allows the buyer to have an inspection before going ahead with the purchase.

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