Essentials of an Agreement to Purchase or Sell Real Estate in New Orleans Market

First and foremost it must identify the New Orleans area property and the price for which it is being sold. Dates are extremely important and should be spelled out such as the date offer was made, date of acceptance, loan approval date and act of sale date. Any contingency with respect to financing should detail the type of financing (F.H.A, V.A., Conventional, Owner, etc) outlining the down payment, loan amount, interest rate amortization period, any costs associated with the loan such as discount points and/or origination and who is to pay for same. The right of the purchaser to inspect the property for deficiencies and the right to request repairs/replacements or rescission of the agreement within a prescribed time period are also critical. There is usually a provision for extension of time for passing the sale in the event curative work is required in conjunction with the title, commonly between 15 to 60 days. There will generally be a deposit of either money or a combination of money and promissory note held by the listing broker. Occupancy of the property must also be addressed. There also may be references to various areas such as lead based paint, mold disclosure, etc. to which the purchaser’s attention may be directed. Any contingencies pertaining to passage of an act of sale on another property must be spelled out in the agreement. If the purchaser and seller have agreed to inclusion of non realty items (such as drapes, curtains, blinds) or repairs, those items should be clearly outlined within the agreement. Buyers should not rely on verbal representations, MLS remarks, or fliers for such items as what is outlined in the agreement will usually prevail in the event of disagreement, between the parties. Clearly written and concise purchase agreements will eliminate the vast majority of disputes which arise in a transaction. An offer to purchase will normally contain an expiration date beyond which the offer will expire. Any amendments or addendum to a purchase agreement should always reference the original agreement by date and all parties to the original agreement must execute these changes. Another area of concern is “Property Disclosure” as this is now required by the Louisiana Real Estate Commission in transactions involving 1-4 family residential properties. (There are certain exemptions to this requirement) In summary, agreements to purchase or sell are complex and may have requirements aside from the purchase agreement, such as property disclosure or distribution of a lead based paint booklet to the purchaser. When entering into a purchase agreement be certain that it is correctly prepared, and that you understand your obligations with respect to the agreement. Above all else it must be clear, concise and it must address all the required areas including redhibition if same is required by seller. Larry Trunk, Inc will prepare and supervise the paperwork in a for sale by owner transaction on a negotiated fee basis. Please feel free to inquire about these services.

The preceding article is subjective and represents the professional opinion of author/ real estate broker, Larry Trunk..