purchase and sale agreements
Purchase and Sale Agreements
Which Purchase and Sale Agreement (PSA) form to use, how to use it, and key points about the fine print.
Please note that form 21 is for houses. For multifamily, use form 20. For vacant land, use form 25. For condos and townhomes, use form 28.
The concepts are still the same.
Line 5 - Reference the listing on NWMLS
Line 7 - Check or Wire, held by Closing Agent
Line 8 - Forfeiture of Earnest Money
Line 9, 10 - Reference the Agent Remarks on NWMLS
Line 11 - On Closing
Line 12 - Requested
Line 13 - prepaid in full by Seller at Closing
Line 14 - Reference the uploaded listing docs
Line 15 - (i) Buyer Broker, (ii) Listing Broker
Often, agents will put "or sooner" after the closing date so that the buyer and seller do not need to renegotiate should they want to close early.
Add the other forms you are using, not counting the Seller Disclosure (17) and the Legal Description (Exhibit A).
Add these in alphanumeric order, so 22J before 22K. Otherwise it makes you look sloppy and/or not serious.
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We recommend reading the entire six pages of the PSA. Here are some common topics that it covers
Earnest money is due two days after "mutual" (the seller signs the offer).
In order to protect the buyers earnest money, buyer must submit contingency responses on time.
In NWMLS contracts, time starts tomorrow and end at 9:00 PM Pacific Time on whatever day that is. If the last day is a weekend or a holiday, it doesn't count.
If there's a weekend or holiday in the middle that's fine, as long as the time period is more than 5 days. If the time period is 5 days or less, then weekends and holidays don't count towards time.
Example:
The contract goes mutual at 11:00 AM on Tuesday. There's a 2-day inspection, so the Inspection Response (35R) is due Thursday at 9:00 PM.
Example:
The contract goes mutual at 11:00 AM on Tuesday. There's a 4-day inspection, so the 35R is due Monday at 9:00 PM.
Wednesday = day 1
Thursday = day 2
Friday = day 3
Saturday
Sunday
Monday = day 4
Example:
The contract goes mutual at 11:00 AM on Tuesday. There's a 6-day inspection (more than 5 days = weekends count), so the 35R is also due Monday at 9:00 PM.
Wednesday = day 1
Thursday = day 2
Friday = day 3
Saturday = day 4
Sunday = day 5
Monday = day 6
Unless you specify that buyer can close in the name or entity of their choosing in a separate form (e.g. 34 or 22d other section), Buyer can only assign the contract if it says " and/or assigns" on the buyer name line on each form, after the buyer name.
Unless an expiration date is specified, a counter offer expires two days after it is received. Because of computation of time, this means, two days starting tomorrow and ending the next day at 9:00 PM.
This paragraph allows the buyer to rescind the contract and get their earnest money back if they discover something advertised in the listing is not true.
And this can be anything. For example, if the listing says "close to stores" you can argue that the stores are not close by the buyer's standards.
Be warned that if you use this paragraph, you will most likely forever burn a bridge with that agent. Use this as an absolute last resort.
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Coming soon!
