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Buying your first home is an exciting time, but before the keys can be handed over, a contract must be signed. It's a legally binding document that's endorsed at the end of all real estate transactions, establishing that all the parties involved agree to the terms of sale. Learning more about the different possible contracts will keep the final stages from feeling overwhelming. 

What Contracts Are Used When Buying a Home?

Purchase Agreement 

A Purchase Agreement is the most common contract used in real estate transactions. It's a comprehensive document that details the sale of the property. The agreement will have the buyer’s and seller's names and signatures, the price, and the closing date. It will also include the obligations, contingencies, the type of deed, and the terms of possession that must be met. 

Since there are closing costs, the agreement will include a list of them and the individuals responsible for the payments. There's also a section that accounts for the earnest money the buyer deposited to establish good faith. 

One of three types of agreements will be used as a contract. The first is a State/Association Purchase Agreement. It's the most common type since most real estate transactions involve agents. When a real estate agent isn't involved in the sale, a shortened version of this contract, called a General Purchase Agreement, will be used. If you're purchasing a mobile home or a vacant lot, attorneys may suggest a Property-Specific Purchase Agreement. 

Assignment Contract

Real Estate TransactionsEspecially if the house is in disrepair, a potential buyer might see it as an investment. They can agree with the current owner to sell the rights to the property. By signing an Assignment Contract, the buyer is now an investor. They will likely flip the house, beautifying it, and making it more valuable. Once the restoration is complete, the investor will sell their rights to an interested end buyer, who purchases the finished home. 

Power of Attorney

A Power of Attorney contract is only used in specific situations where the buyer can't act independently. They may not be physically or mentally able to sign the contract. It’s often used by adults taking care of elderly loved ones who cannot sign the documents themselves. To ensure they can still purchase the home, an individual will act as their power of attorney and sign the contract in their stead. 

 

Before signing, have Bernardini Law P.C. review your contract's details to ensure the terms are fair. Christine Bernardini's attorneys have decades of experience in all forms of real estate transactions. They vigorously represent their clients to secure a reasonable price and see that the house is properly inspected. When it's finally time to sign your name on the line, it will be with the peace of mind knowing that the terms are in your favor. Visit their website for more information on their practice areas. If you're in the North Andover, MA, area, you can schedule an appointment at (978) 794-5525. 

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