47+ Sample Purchase Agreement Templates

What is a Purchase Agreement and When is it Needed?

Purchase agreements place into writing future transactions regarding an exchange of pieces of property or personal products. Essentially, it is a document that lays out the terms and conditions of a future purchase. It primarily provides the details of the payment plan and inclusions, most notably, the warranty. Because of its primary purpose, this document is also commonly known as the Agreement to Sell Personal Property. The agreement contains the necessary details that will make the exchange faultless. Specifications of the product, delivery details, and payment terms are spelled out in separate sections of the document.

A key defining feature of this document relies on when it is necessary. Most sales documents are required after the exchange of products and money, but purchase agreements are needed before the actual transaction. The settlement of the agreement beforehand decreases the chances of backing out from the deal at the last minute. It also permits flexibility from both parties. The involved parties have relative freedom in settling the details of the agreement, especially regarding the terms of the payment and the procurement of the product.

Building Blocks of a Purchase Agreement

Trade and commerce naturally evolved due to human need. Locals exchanged goods with people from foreign lands to acquire products. A crude form of exportation, as one might say. The exchange of agricultural produce gave rise to free markets in ancient civilizations. All forms of transactions were not forced. A standard form of currency was absent too. The market developed into the capitalist system that we have now. The presence of a framework and stable system demanded the need for contracts to pinpoint who owns what. And until when, depending on the nature of the agreement.

Basic Information: A key element in any contract is the complete and accurate details of the involved parties. From the legal names of the parties, down to the current address and the active contact details. Requiring these pieces of information have obvious reasons to track and address both parties easily. Furthermore, the parties are then labeled as the ‘Buyer’ and the ‘Seller’ accordingly. After introducing both parties, the details regarding the product follow. The specifications of the item are needed. When dealing with real estate property, attaching maps and other necessary documents can help clear out this information. The quantity of the item in question is also finalized at this point. And the most important basic detail required is the selling price.Payment Arrangement Details: As the main purpose of the document is to settle with an agreeable payment arrangement between both parties, the majority of the contract contains these pieces of information. This part primarily focuses on the duration of the payment term and method of payment. The duration can be for several months until years. As for the methods, it can mention all the possible methods and the preferred means of both parties. This part of the contract can also include the approach utilized by the buyer to pay for the dues. The seller can require the buyer’s financial statements to prove that the party is capable to pay. Or It can include a summary of the terms of the buyer’s mortgage, if ever applicable. And if the seller provides warranties, the necessary stipulations are also under this section.Important Dates to Remember: Purchase deals have several due dates to go through the process without any hitch. Likewise, a purchase agreement has several important dates to remember scattered in the document. These dates are for vital meetups like the day for exchanging the goods, technically, the day when the buyer takes full ownership over the property or product. Other significant dates that are in the contract concerns the delivery or shipping of the product if it is necessary to the arrangement. Both parties need to take note of these dates to provide their end of the agreement.Dispute Resolution Stipulations: Using a contract aims to protect the interests and resources of the parties. It also aims to avoid messy court trials by including provisions to resolve stipulations. These stipulations cover the entire process of resolution that starts with negotiation, mediation, and litigation. The contract can include a list of negotiable and non-negotiable issues, and another list containing the issues that need to undergo litigation. As for mediation, the parties can choose a third party to act as a mediator or consult with a business lawyer. This element is crucial in ensuring the effectiveness of a contract as a means of resolving or avoiding conflicts.

What are the Variations of Purchase Agreements?

Technological innovations revamped the global market. Stores are focusing on their digital marketing by being available and accessible through several online platforms, including a website and mobile applications. But despite this significant change in consumers’ behavior and preferences, there are still products that are more convenient to deal with offline. Real estate and vehicles require personal interaction and settle the agreement over signed contracts.

Car/Vehicle Purchase Agreement

Although purchase agreements appear to be the same, it has several variations according to the required good. Purchase agreements require an accurate and unique description of the item. For car/vehicle purchase agreements, it primarily requires the identification number of the car. Vehicle identification numbers are used by the automotive industry to identify each type of vehicle. It also calls for the make, model, color, and production year of the car. The number of miles in the odometer is required in purchasing used cars. Aside from these pieces of additional information, car deals also have additional payments, especially in acquiring brand new models, that are not required in purchasing other properties. Some of the additional fees are for documentation, registration, and dealership.

Real Estate Purchase Agreement

Purchasing real estate properties require a tailor-fit purchase agreement to cover the complexities of the property. It deals with real property such as pieces of bare land, residential, and commercial spaces. Most real estate deals require earnest amounts that serve as security deposits to assure the seller that the buyer is sincere in buying the property. There are also more discussions regarding insurance and warranties. Settlements about which party will shoulder a particular fee. Also, real estate deals have more dates to remember such as the closing date which signifies that the ownership is finally transferred to the new owner. And a distinguishing factor is the presence of contingencies; situations that allow either of the parties to legally back out from the agreement when a condition is not achieved. It can happen when an inspection came out as unsatisfactory. This means that the features and condition of the property are not what the seller promises. If this does happen, the buyer can back out from the deal without incurring legal liabilities.

Purchase Agreement vs Various Sales Documents 

Wanting a piece of property or vehicle is easy, but purchasing it takes patience, effort, and a ton of paperwork. As one can expect, a purchase agreement is one of the needles in a haystack. The entire process of ordering until transferring ownership requires essential documents. 

Ordering a shipment of bulk goods require a valid purchase order. It contains details like a unique description of the item, order number, and shipment number to track its delivery route. On the other hand, the main users of purchase agreements are parties who have the intention to buy or sell goods. The document binds the intention of both parties to deliver and pay properties. And after the exchange is finalized, invoices and bills of sales are produced. Both documents record the transaction. But an invoice requests payment, while a bill of sales transfers ownership of the item from the former owner to the buyer.

All of these documents are necessary for making a legitimate sale. It records the intention, order, delivery, and transfer of ownership. If you find yourself in the place of a buyer, take note of each document’s importance as it will protect your interests and resources.

How to Compose a Professional Purchase Agreement?

Even though the need for written agreements is inherent, a legal concept requires it. The statute of frauds requires certain deals to be in writing such as selling of real estate properties, deals that go for more than a year, and purchases that exceed $500. So, in line with this requirement, here is a basic process on how to make a tailor-fit purchase agreement.

Step 1: Start with the Basics

In starting a purchase agreement, be straightforward with the facts of the deal. Immediately indicate the purpose of the contract. It also helps if you specify whether it is a real estate, vehicle, or property purchase agreement. Next, introduce the parties involved in the property that is up for sale. For equipment purchase, it is best to include the serial or identification number of the equipment for a specification. It is also preferred to indicate the selling price at the beginning of the contract, without specifying the break down of the values to come up with the cumulative amount. These factors create the foundation of the agreement, all the other details in the contract revolve around these elements. And if there are security deposits or earnest money, in real estate deals, it is also advisable to include it in the starting content of the agreement.

Step 2: Define the Property/Vehicle/Real Estate

The next best thing to do is to elaborate on the details of the property for sale. State its current condition and its inclusions. The availability of fixtures, mostly in residential and commercial real estate properties, significantly affects its price point. So, to avoid questions regarding the price, create and include a list of the fixtures in the property. Fully furnished spaces are, logically, more expensive than pads and semi-furnished places. The seller must also be transparent in indicating the current condition of the property. In most second-hand car deals, the current status significantly impacts its marketability. Always remember that there are some properties, especially gadgets that quickly depreciate. As a buyer, it is essential to know these kinds of information to make sure that you are dealing with a fair price.

Step 3: Finalize Payment Deal

As mentioned, the primary focus of purchase agreements is to finalize the payment arrangement of the deal before going through with it. After the initial introduction of the selling price, the elaborate details continue in a separate section. Document the final payment arrangement by indicating the preferred means of payment of both parties. Also, it is important to note how the buyer will pay for the amount, especially for real estate and car deals that can go on for years. Most buyers opt to apply for mortgages and loans. If this is the case, state the status of the application. Apart from the method of payment, the contract should also contain arrangements on which party will pay for what. In real estate purchases, there are closing fees. Some sellers opt to pay for this fee, while others do not. To avoid conflict, indicate all arrangements in writing.

Step 4: Conflict Settlements and Termination

After settling the details of the parties, product, and payment, the next section of the purchase agreement is a list of provisions regarding resolving disputes and resolution of the contract. Both parties can be proactive in this matter. Both can research on the common causes of premature termination of purchase agreements and draft provisions that can resolve those issues or avoid it.

Contingencies are available for real estate deals; these are specific conditions wherein a party can legally back out from the agreement. A typical example is the finance clause. It allows the seller to back out from the contract if the mortgage application of the buyer does not go through, and they are allowed to look for a more competent buyer. Deal deadlines are also deal breakers in purchase agreements. Remember, these agreements are finalized before the exchange of goods. If the buyer does not adhere to the time frame of accepting the offer, the entire deal will not carry out.

Before making the contract legal and binding, go over all the sections of the document. Make sure that there are no grammatical and typographical errors. Surely, no one wants to be in a legal predicament because of simple and avoidable mistakes. For first time dealers, it is advisable to seek legal advice with an attorney, even if the laws of the state do not mandate it. This necessary step can incur a high cost, so both parties can discuss the method of payment. One party can either own the responsibility or split the bill. Either way, consulting legal counsel can make sure that the agreement is fairly written and if there are no loopholes and circumventions.