You need a real estate contract whenever you want to sell your personal property to someone else. Whether you get the help of a listing broker or do it yourself, there are certain factors you should always include in your "purchase and sale" agreement, depending on the state.
The following article will discuss how to draft a real estate contract for the state of New York in the best way possible so that it complies with state and federal law.
Create A Purchase Agreement
Drafting a real estate purchase and sale contract in New York isn't as hard as people make it to be. In this section, we'll outline all the basic clauses that should always be in the document, and then, we'll move on to the required disclosures.
- Buyer/Seller Information: First, include the basic contact information for both the buyer and seller, as well as any other party involved in the purchase and sale agreement.
- Property Information: Every home purchase agreement must include a thorough and legal description of the property, including its address and type.
- Purchase Price and Payment Method: Include the purchase price for the property; it must be an amount that both parties agree to. Then, include any clauses surrounding "Earnest Money" and "Balance" payments, according to your selling requirements.
- Contingencies: Here, you will list all the contingencies the buyer must agree to before you sign the purchase and sale agreement. This includes financing, insurance, sale, and title contingencies.
- Closing Date: The closing date will represent the moment when the sale "transaction" gets completed. Include a date that both parties agree to. Make sure to also include any clauses for possible extensions or modifications of this date.
- Surveys and Appraisals: Include the buyer's right to conduct a survey of your property before signing. Moreover, explain the buyer's rights surrounding appraisals. If the appraised value of your home is different from the actual purchase price, both parties have the right to renegotiate the terms of the document.
- Possession of the Property: This clause outlines the date when the buyer will receive exclusive possession of your unit.
- Dispute Resolutions: Here, outline all the steps that need to be taken when resolving a dispute, including hiring a real estate attorney or other related measures.
- Governing Law: All the terms on the real estate purchase document must be compliant with New York law. Make sure to include a clause that outlines that.
Other New York-related terms you should include in your agreement include:
- Binding Effects
- The Right to Have Copies of the Document
- Additional Terms and Conditions.
- Signatures of All Parties Involved
Keep in mind that your New York real estate document won't be legally binding until all parties sign it.
Property Condition Disclosure
Yes. New York law requires sellers to include a property condition disclosure statement, which will outline the seller's knowledge about any possible defects the property may have. Both parties must sign this disclosure statement.
Before 2001, New York sellers weren't responsible for undisclosed defects in the property, but now, not including this statement could cause some legal problems.
In this particular state, if you don't include a real estate condition statement with the property's known defects, you may have to pay $500 in credit to the buyer.
Besides the disclosure statement, federal law requires sellers to include a lead-based paint disclosure if the property was built before 1978.
The statement will outline the seller's knowledge about lead-based paint in the property (if there's any) and an EPA-approved pamphlet, which explains the health hazards that come from this material.
We hope this page has helped you understand real estate agreements in New York and how to draft your own document.
If you need any other resources for your real estate rental or selling needs, make sure to check DoorLoop for everything you need!
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Why Do Sellers Need to Include a Property Condition Disclosure Statement?
Federal law asks sellers to include these disclosures so that buyers aren't surprised by any property defects upon moving in. If the seller fails to provide this disclosure, they may need to pay up to $500 in credit to the buyer.
What Do You Need to Write a Real Estate Contract in New York?
You need the following:
- Information of all the parties
- Description of your legal property
- Closing dates
- and more
Can You Cancel or Walk Out of a Real Estate Contract in New York?
Yes. If you don't sign the contract after an offer or counter-offer, you can walk out of it without any problems. Moreover, if the buyer's contingencies aren't met, you can also walk out of the agreement.
What Is the Most Important Condition to Be Met in a Purchase Agreement?
It depends on the case, but most of the time, the most important conditions to be met are the contingencies. If they aren't met, the seller can cancel the agreement.