For many homebuyers, it’s tempting to take a “do-it-yourself” approach to buying property in Tennessee. Here at Rochford Law & Real Estate Title, we have had the pleasure of working with many individuals who opted to buy or sell a home without using a real estate agent. Typically, these individuals are understandably looking to keep the purchase price down by avoiding costly real estate commissions. Buying or selling property is a huge transaction and it pays to do it right.
What Does a Real Estate Purchase Agreement Form Do?
Although it doesn’t actually transfer the title to a building, lot or home, it helps you determine the responsibilities of everyone involved in the transaction before actually transferring the property in question. In other words, it lays the foundation for the final sale.
What’s Included in a Typical Purchase and Sale Agreement?
It shouldn’t come as a surprise that real estate transactions can vary greatly from one another. Some are very straightforward, others less so. A purchase agreement can be as detailed as you need it to be; however, here are the basic components:
Names of all parties involved, whether individuals, LLCs, or corporate entities
Dates involved (offer, offer expiration, when the sale is to occur if the offer is accepted)
A legal description of the property
The agreed upon price
Inspections, warranties, and escrow information should also be included in the agreement
Why You Need to Use a Tennessee Purchase and Sale Agreement
Typically, buyers or sellers use an agent-supplied fill-in-the-blank purchase and sale agreement. It’s worth noting, however, that these ready-to-use forms are often copyrighted by the real estate association who hired legal counsel to draft the form. When an individual opts to close on a deal without a real estate agent, they may be likewise tempted to download a free form from the internet.
Unfortunately, there are a number of risks to downloading a form online that may put your real estate transaction in jeopardy! Not only would an individual run the risk of violating copyright law, risking stiff penalties and the threat of a copyright lawsuit, but these forms are probably not drafted by an experienced Tennessee real estate attorney.
Don’t be fooled by statements along the lines of “these forms are drafted and reviewed by licensed Tennessee attorneys.” Unfortunately, you can’t believe everything your read online and the odds are slim that the forms are properly and legally verified.
Tennessee Real Estate Laws are Complicated, Unique, and Evolving
Not only are our real estate laws influenced by Tennessee statutes (which are constantly being updated, modified and rescinded by the Tennessee legislature) but Tennessee common law, as created by Tennessee courts, is constantly evolving based upon court decisions. An updated Tennessee real estate contract should consider the current and changing standard practices and procedures familiar to local real estate agents, lenders, surveyors, title companies, and others involved in these transactions on a daily basis.
The purchase agreement should clearly indicate who pays for the loan policy of title insurance, the owner’s policy of title insurance, the transfer tax, the mortgage tax, recording fees and attorney's fees, and closing costs associated with drafting the closing statement and the preparation of the deed. It is best for the contract to address these issues in a manner consistent with standard practice and procedure in Tennessee to make for a smooth closing that’s free from stress.
If you’re planning on saving thousands by closing on a real estate transaction without a realtor, be sure to consult with a reputable real estate closing attorney. Contact Rochford Law & Real Estate Title at 615-269-7676 for a free copy of our Tennessee Real Estate and Sale Agreement.