When buying or selling an Iowa commercial or residential property, you have more than just the purchase price to worry about. Both parties will need to sign a purchase agreement or real estate contract that details all the important aspects of the transaction.
First-time buyers and sellers may find the requirements of an Iowa residential purchase and sale agreement to be a bit daunting initially, but with a little bit of help, you can get through it without any problems.
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Iowa Real Estate Purchase Agreement
Also known as a residential purchase and sale agreement, this is a legal and binding real estate contract signed by both the sellers and potential buyers in which all the important details, disclosures, terms, and conditions of the sales agreement are mentioned.
Five Important Details
If you want your purchase and sale agreement to be both binding and comprehensive, five important things must be understood and made clear, which are:
- Who Is Responsible for Preparing the Document?
In Iowa, preparation of the real estate contract is usually done by either a real estate agent handling the sale or a real estate attorney hired to oversee the transaction.
Iowa residential purchase and sale agreements can also allow "dual agency," whereby if the sale is by the owner, the agency can prepare the required paperwork. Not all states allow this.
- Earnest Money Deposit Requirements
A buyer may be asked to make a good faith deposit, known in Iowa as an Ernest Money Deposit. This will be due within three days of the signing of the Iowa real estate purchase agreement and is usually between 1% and 3% of the total purchase price.
- Important Contingencies
The following are some of the important contingencies that the potential buyer and seller may choose to include in the real estate purchase agreement:
- Home insurance contingency
- Inspection contingency
- Financing contingency
- Title contingency
- Appraised contingency
- Caveat Emptor
Buyer beware, or "Caveat Emptor" is something that all potential buyers need to understand because it affects the sale agreement in that they will be agreeing to buy the residential property in its current condition, defects, and all.
- Both Parties Signatures
Finally, a residential or commercial property purchase agreement is not complete or legally binding without being properly dated and signed by both parties involved in the sale agreement.
Certain required seller disclosures need to be included in all sales otherwise the seller will be exposed to a potential lawsuit if anything were to go wrong, such as:
- The residential property disclosure form
- Radon disclosure fact sheet
- The lead-based paint disclosure form
What Is a Seller Property Condition Disclosure Form?
A seller property condition disclosure is a legal document whereby the seller is required to let the buyer know of any undisclosed and unfavorable conditions of the property.
What Is the Effective Date on an Iowa Residential Purchase and Sale Agreement?
This is the date on which all the terms and conditions of the purchase and sale agreement become binding to both parties.
How Do I Find the Legal Description of a Residential or Commercial Property?
The Iowa County Recorder’s Office is your best source of information regarding the legal description of any property built in the state.
What Fixtures Are Usually Included in an Iowa Residential Purchase Agreement?
A residential purchase and sale agreement usually come with the following fixtures attached:
- Wall-to-wall carpets
- Light fixtures