Real Estate Purchase and Sale Agreement and Joint Escrow Instructions
Definition and meaning
The Real Estate Purchase and Sale Agreement and Joint Escrow Instructions is a legal document that outlines the terms and conditions under which a property is bought and sold. This agreement establishes the rights and obligations of both the seller and buyer, detailing vital aspects such as the purchase price, earnest money, contingencies, and closing procedures. The inclusion of joint escrow instructions ensures that both parties are in agreement on how the escrow process will be managed.
Key components of the form
This agreement consists of several critical components that are essential for a smooth transaction. Among these, the following elements are particularly important:
- Purchase Price: The total amount to be paid for the property, including any earnest money deposits.
- Contingencies: Conditions that must be met before the purchase can proceed, such as inspections or financing provisions.
- Closing Date: The date when the ownership transfer occurs and the buyer takes possession of the property.
- Earnest Money: A deposit made by the buyer to show serious intent to purchase, which is held in escrow.
How to complete a form
Filling out the Real Estate Purchase and Sale Agreement and Joint Escrow Instructions requires careful attention to detail. Here are step-by-step instructions for completion:
- Step 1: Fill in the date of the agreement.
- Step 2: Complete the names of the seller and buyer, ensuring that all parties are accurately identified.
- Step 3: Specify the details of the property being sold, including legal descriptions as required.
- Step 4: Clearly state the purchase price and amount of earnest money.
- Step 5: Add any contingencies that will apply before the sale can be finalized.
Common mistakes to avoid when using this form
When completing the Real Estate Purchase and Sale Agreement and Joint Escrow Instructions, it is crucial to avoid certain common errors:
- Incomplete Information: Ensure all fields are filled out completely to prevent delays.
- Missing Signatures: All required parties must sign the agreement; otherwise, it may not be enforceable.
- Overlooking Contingencies: Failing to include necessary contingencies may leave the buyer vulnerable.
What documents you may need alongside this one
In conjunction with the Real Estate Purchase and Sale Agreement and Joint Escrow Instructions, consider preparing the following documents:
- Property deeds and titles.
- Inspection reports.
- Environmental assessments.
- Financing documents, if applicable.
Who should use this form
The Real Estate Purchase and Sale Agreement and Joint Escrow Instructions should be utilized by:
- Individuals looking to buy or sell residential real estate.
- Investors involved in property transactions.
- Real estate agents facilitating sales.
- Legal professionals assisting clients in real estate matters.
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FAQ
Escrow instructions may be amended by the parties at any time. However, once both parties have deposited their initial instructions, a party may not amend that person's escrow instructions without the consent of the other party.
When escrow instructions differ from the sales contract, and the escrow instructions have been signed by both the buyer and seller, which is correct? The seller's broker must write a new deposit receipt.
Any changes in the escrow instructions are called "amendments" and should be signed by both buyer and seller.
When the executed escrow instructions differ from the purchase agreement, which of the following is correct? The escrow instructions take precedence.
True. Joint instructions are commonly used. The buyer and seller may each issue separate instructions as well. (T/F) Escrow instructions are legally binding on the escrow agent.
Joint Escrow Instructions means a letter executed by Seller and Buyer to the Closing Agent confirming that all conditions to Closing have been satisfied or waived by the parties.
In the event a dispute arises over whether the earnest money should be returned (for example, if the seller argues that the buyer did not notify the seller in a timely manner of the intent to back out of the contract), the escrow holder will continue to hold the earnest money until the dispute is resolved.
In the event of a conflict between a purchase agreement and escrow instructions, the escrow instructions will prevail because they are more recent. If the parties are unable to resolve a conflict, the escrow agent should interplead any funds or items that have already been deposited into escrow.