TIP: Always use “and/or assigns” after the buyer name(s), for possible wholesaling, optioning, or selling your interest in the contract to another party.
22 Purchase Escape Clauses That Can Make and Save a Bundle of Money
Purchase contract contingency clauses to make a standard local purchase agreement protect your needs.
1. (all) Subject to adequate appraisal to buyers satisfaction within 15 days of acceptance.
2. (fixing) Buyer reserves the right to enter and repair property upon acceptance in order to obtain new financing. Buyer releases all claim on repairs or materials installed if purchase not completed by time set here within to close.
3. (extension) Buyer will be granted a 30 day extension on this contract with a ______________ cash payment.
4. (to credit payment you make as down payment money) Seller agrees to accept from buyer for payment of the "additional payment" described in paragraph ____ a certain mortgage on _______________________ described as follows: .....
5. (general when seller need dot fix a few things) All plumbing, electrical, heating, A/C and sewer systems to be in working order at closing or repaired by seller.
6. (used to use alternate collateral other then the equity in the property: IE: stock, or other assets) The buyer reserves the right to substitute collateral securing the purchase money mortgage, said
collateral to be of equal or greater value of owner's equity. Seller shall execute all documents necessary to do so and those documents will be held in escrow by closing agent until released by Buyer.
7. (for the right to buy a private seller created mortgage from a seller) In the event seller should elect to sell the purchase money mortgage at a later date, buyer (maker) shall have the right of first refusal to bonabfidefide written offer.
8. (for buying income property) This transaction is subject to Buyer's inspection and written acceptance of all the legal financial records and data of the seller on the property (including, but not limited to all leases, rent records, expense records and tax returns regarding the property) for verification of representations of income and expenses.
9. (for creating a seller “fix it” list) This transaction is subject to complete inspection of the property for compliance with the building, health and fire codes and Buyer's written acceptance of the condition of the premises. Seller shall correct all code violations.
10. (for hidden damage, mold, etc) Seller warrants that all personal property, building structure, wiring, appliances, electrical fixtures, plumbing, heating and air conditioning devices are in good operating condition and that the roof is in good repair and free of leaks, and that there are no water damage or mold conditions not disclosed by the seller, and all will be so at closing and for one year after the date of closing. These warranties shall survive and extend past delivery of
deed.
11. (protect against hidden leases or contracts against the property) Seller warrants there are no leases on the property for a period longer than six (6) months and no leases containing an option to renew on like terms.
12. (subject to) This transaction is subject to Buyer's inspection and written approval of terms of existing mortgages. This transaction is contingent on existing mortgages not having clauses providing for a balloon payment, balance due on sale or assumption, or interest increase on sale or assumption or prepayment penalty.
13. (all purchase agreement when possible) Buyer has the right to immediate possession of the property for purposes of making improvements and/or showing said property.
14. (a great escape clause in case you are unsure whether you want it, at least you will have something in case you want the deal – makes it almost an option). This transaction is subject to an inspection by my partner within 3 days of the seller's acceptance of the offer.
15. (flexibility in mortgage payments) The seller agrees to hold a purchase money mortgage and further agrees that the maker of the promissory note reserves the right to miss one payment per loan year and failure to make such payment shall not be a default of the said note.
16. (foInstallmentnstallment contract type agreements) Purchase money mortgage is to be paid as per theamortizationortization schedule.
17. (to cause private mortgage to subordinate to new financing) Seller(s) understands the Buyer(s) or assigns will be getting a first mortgage of a maximum of the appraised value less the purchase
money mortgage to the Seller(s). Seller(s) hereby acknowledge that they understand that the purchase money second mortgage that they will hold is junior to the above mentioned first mortgage.
18. (to remove personal liability from a note) LIMITATIONS ON LIABILITY: The liability on the part of the Buyer(s) to satisfy the terms and conditions of the note(s) exfavord in favor of the Seller(s) as part of this agreement shall be limited to the property securing such note(s) and shall not extend beyond this. There will be no personal liability to the maker of the note.
19. (to defer interest) Seller(s) understands that the interest on the purchase money mortgage will not begin for _________ months to give Buyer(s) time to repair property and/or find an occupant and that this means the first payment to the Seller(s) will be _________ months after closing.
20. (obvious) If the house is vacant at the time of acceptance of this offer the Seller(s) hereby gives permission for the Buyer(s) to retain a key to show the premises to contractors and prospective occupants.
The Buyer(s) agree that no change will be made to the property until after closing without Seller(s) written permission.
20. (creates an effective simple zero interest agreement without a promissory note) The purchase money mortgage shall be payable at $_____________ per month for a period of _________ months until the total sum of $__________ is paid in full.
21. (to effectively make a purchase agreement an “option” agreement). Purchaser’s obligation is subject to finding and closing a sale with their eventual buyer.
22. (pre-foreclosure for negotiating short sale discount first) Subject to purchaser’s acceptable negotiation and discount with current lenders who hold liens on subject property.
IMPORTANT DISCLAIMER
Though presented here in good faith, and with reasonable confidence, the reader is advised hereby to have each of these sample forms thoroughly reviewed and approved for acceptability and adaptability to your area by a competent attorney before using them.
www.Brian-Gibbons.com , its principals, employees and/or affiliates specifically disclaim responsibility for applicability or enforceability of these documents. All such forms are provided here as sample exhibits only without regard for their suitability in any particular area or jurisdiction, or for any specific use.
The author of this information is not in the business of practicing law or offering legal or accounting advice in any manner. All such issues must be taken up with your own attorney, accountant, Realtor and/or other busiadvisor financial advisor.
