Home Purchase and Sale Agreement

The final written agreement containing all the specific details of your new home purchase is in the purchase and sale (P&S) agreement. This is the document that seals the deal after both the buyer and seller have mutually accepted the price and terms on the home.

When it comes to property for sale in New Hampshire, the purchase and sales agreement should include:

• The agreed upon purchase price: This is signed off by both the buyer and seller. Note that this price might change during negotiations before the closing date, if for example the home inspection reveals an issue in need of repair and the buyer renegotiates the home price to reflect a credit for those repair costs.
• The deposit of earnest money: The purchase and sale agreement will show the dollar amount of the buyer’s deposit on the home and how and with whom the check was deposited. Typically, the buyer needs to deposit a cashier's check within three days of mutual acceptance of the deal. The check is usually held by a neutral third party until the closing.
• The closing: The closing date is when your purchase of the home will be finalized, transfer of the property will be recorded with the local government, and the seller receives his money for the home. Closing dates have been known to change, however, typically because of a snag in financial paperwork and underwriter requirements being in order and completed.
• The title for the home: A title is a legal document listing the history of who has owned the home. After a purchase and sales agreement is reached, this document is examined by an attorney or title company to look for any reason, such as a lien on the property, which might prevent the home from being legally sold. The results are written up for the buyer to see. Title insurance protects the lender and homeowner from damages if a problem with the title comes to light after the buyer purchases the home. Usually, the buyer pays for the lender's title insurance policy, and my also purchase a separate policy to protect themselves. But the purchase and sales agreement should also state that the seller will provide a clear or marketable title of ownership to the buyer.
• Terms and contingencies: These are conditions that have to be met in order for the purchase of the home to be completed. If any of the contingencies are not met, the buyer or the seller may have the right to walk away from the deal.

Typical Contingencies

1. Contingencies in your purchase and sales contract may include allowing the buyer to have a home inspection before proceeding with the purchase of the home and the right to further negotiate the selling price for a credit to cover the cost of any major repair. It may state that if the repair issue is substantial, the buyer has the option of backing out of the purchase and getting their earnest money deposit returned.
2. Financing can also be a contingency requiring the buyer to have full approval for any required loan.
3. Title contingency allows the buyer to review the title company’s report and back out of the deal if there are any problems with the title. An appraisal contingency may be included which allows the buyer to back out of the deal if the home does not appraise in value for the amount that the buyer had agreed to pay for it.
4. Contingency of a home selling: Sometimes a buyer has a home of their own to sell and the seller of their potential new home is willing to go under contract with them regardless. The belief is that the buyer’s home will sell in a reasonable amount of time. This contingency gives the buyer the right to back out of purchasing their new home if they are unable to sell their current home. It also may set a time limit that allows the seller a way out of the contract if the buyer’s home does not sell within that specified reasonable amount of time.
5. Closing Costs: There are traditional fees charged for the loan process, recording the deed, attorney’s work, the title company’s research and report and even currier or postage costs, which are added in addition to the purchase price of a home. These will be listed for both the buyer and the seller on the final settlement statement available before the closing.