Understanding the Alabama Residential Purchase Agreement: A Simple Breakdown

This guide explains the key points of an Alabama Residential Purchase Agreement in easy-to-understand terms. Learn about property purchase terms, costs, inspections, appraisal contingencies, termite reports, and insurance requirements. Whether you're a buyer or seller, this summary helps you navigate the contract, ensuring both parties understand their responsibilities leading up to closing. Ideal for first-time homebuyers or those needing a clear explanation of complex legal agreements.

1. Purchase Price & Property: The buyer agrees to buy, and the seller agrees to sell the property at the agreed price. This includes all improvements, fixtures, and anything permanently attached to the home.

2. Terms of Purchase: The agreement specifies how the purchase will be made, either through cash, a new mortgage, or other financing arrangements. If a mortgage is involved, the buyer must get pre-approval and submit it to the seller.

3. Appraisal: If the home does not appraise for the purchase price, the buyer can either negotiate or walk away, provided they notify the seller within a set time.

4. Costs: The buyer typically covers closing costs, loan fees, and insurance, while the seller pays for the title insurance and deed preparation. Some costs may be negotiated.

5. Inspections: The buyer can opt for home inspections, but if they find issues, they must notify the seller within a specific timeframe. Sellers are not obligated to make repairs unless agreed.

6. Termites & Wood Infestation: The buyer must obtain a Wood Infestation Report (WIR) to confirm no termite or wood-damaging insects are present. If the lender does not require it, the buyer can choose not to get it. The buyer covers the cost unless the loan type requires the seller to pay.

7. Insurance: The agreement can be contingent on the buyer obtaining satisfactory homeowner's and flood insurance. If not available, the buyer can cancel the contract.

8. Closing and Possession: The sale is completed at closing, where the buyer gets the property, and the seller hands over keys and necessary documents. The home should be in the same condition as when the offer was accepted.

9. Final Walk-Through: The buyer is allowed a final check before closing to ensure that everything is in order and any agreed-upon repairs are completed.

This is a general overview, and each clause includes specific timeframes and legal terms that may impact the transaction. It's recommended to review this document with legal counsel to ensure clarity on both parties' obligations.

Alabama Residential Purchase Agreement

 

Posted by Meredith Amon on

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