What is a Purchase Agreement and What Should it Include?

Purchase Agreement is a legally binding contract between the buyer and seller of real estate. It outlines the terms and conditions of property sale that have been agreed upon by both parties. The purchase agreement contains the details of the property like the location, area of the property, purchase price, payment schedule, and other important aspects involving the property purchase. It is an important legal document that proves the ownership of the property and holds legal validity. Both parties bound by the agreement understand their legal obligations before the final ownership is declared and the transaction is completed.

The Purchase Agreement contains information like:

1. Name, Age, Address, PAN Card, and Aadhar Card details of the parties involved.
2. Details of the property, its address and location as per the government records.
3. Land record details
4. Contingencies if any,
5. A closing date
6. Details of the deposit amount paid by the buyer to the seller to confirm their interest in purchasing the property
7. Payment terms and conditions
8. The agreement is governed by the Laws in India
9. The agreement falls in a jurisdiction mutually agreed by parties involved
10. Signatures of both the parties agreeing to the legitimacy of the agreement enforceable under law.

Importance

The Purchase Agreement is the most important document in the real estate transaction. All parties should have agreed to the terms and conditions of the agreement to avoid conflicts. The Purchase agreement clauses should be formulated by the parties involved and vetted by their legal counsel. The clauses and terms should be clearly understood by the parties as these bind them for the length of agreement tenure.

The purchase agreement clarifies the agreed terms of the transaction, provides safeguards to the parties involved and establishes a legal framework for the sale.

Both parties must consult a qualified and experienced legal advisor before signing documents. The Purchase Agreement should be maintained properly by the buyer and the seller.