Question:

What is Agreement for Sale of property?

Answer:

The agreement for sale of property resembles first mortgage on a property. The owner sells on credit terms to a buyer who is making monthly installments. The buyer is entitled to ownership of the property after the purchase price is fully paid.

Important Items to Include in the Agreement for Sale

  • The seller is expected to provide evidence that the property is "unencumbered", that is, free from other liens.
  • There should be a clause providing that if you cannot get a mortgage to fund the purchase, the agreement for sale should allow to cancel it.
  • There should be an item about who is responsible for covering property related expenses such as property taxes and utility bills.
  • Home inspection including check on electrical and plumbing systems should be done and the agreement for sale should specify how repair costs (if any) will be split between the buyer and the seller.
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