When buying or selling a home, you will have to sign a real estate purchase and sale agreement, so you must understand state and federal law that facilitates these transactions.

In this article, we'll provide all the information you need for an Alabama residential purchase or sale.

Residential Sales Contract

A buyer and seller can create a legally enforceable contract for the sale of properties in Alabama by using a real estate purchase agreement. The agreement's key clauses will be the purchase price, legal description, earnest money, effective date, and finance terms.

This contract may also be subject to other terms agreed to by both parties, such as the buyer's ability to sell their house, their ability to obtain finance, or any other conditions. After both parties have signed the document, each has the responsibility to carry out their duty of specific performance to facilitate a close.

The sale of the property will be complete once all terms have been satisfied, the offer price has been approved, and the closing date has passed.

State Law

There are certain state laws that govern the sale of real estate in Alabama. Sellers are required to adhere to the buyer beware and known defects regulations.

Buyer Beware

Because Alabama is a "caveat emptor" or "buyer beware" state, the buyer agrees to accept the property "as-is." This means that the seller has not made any promises to conduct repairs or make changes to the premises.

Known Defects

Sellers have a duty to disclose known facts if the buyer specifically requests information about the property.

Required Seller Disclosures

Even though Alabama has a "buyer beware" law, this does not free the seller of responsibility. They are compelled to make disclosures in particular circumstances. The Code of Alabama stipulates that information must be shared if:

  • Concealing it puts the purchaser's health or life in danger.
  • A buyer actively requests information about specific problems.
  • Both parties are in a fiduciary relationship.

While other states have a host of required disclosures, such as material defect, an Alabama real estate purchase agreement only needs to have one mandatory disclosure. Let's take a look at the required disclosures in Alabama.

Lead-based Paint Disclosure

Federal law requires sellers to include a lead-based paint disclosure in every real estate contract where the property being sold was built prior to 1978.

Property Disclosure Statement

Although it is not necessary, it is advised that the seller agrees to provide a property disclosure statement to let the buyer know any important details regarding the property.

Final Thoughts

Understanding the laws governing real estate contracts is essential if you're buying or selling a home. If you need help generating a custom agreement, why not try DoorLoop? Contact us today to try it out for free!

More resources:


Does an Alabama residential purchase agreement have to mention the purchase price?

Yes. This is an essential element of an Alabama real estate contract.

Can a seller cancel a sale agreement in Alabama?

Yes, sellers are permitted to cancel a real estate transaction if their contingencies are not satisfied.

Where can I find a purchase and sale agreement?

Simply download our free forms or use our innovative property management software to create a custom agreement.

Is a property disclosure statement mandatory in Alabama?

No, it is not mandatory, but it is highly recommended.

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David is the co-founder & CMO of DoorLoop, a best-selling author, legal CLE speaker, and real estate investor. When he's not hanging with his three children, he's writing articles here!