Phraseology and the Purchase Agreement: It's all in the Details!
 
While the standard 'boiler plate' purchase agreement provides the foundation for negotiations, in this chapter we offer additional verbiage that will further communicate your clients position.  Whether you're looking to negotiate through a double contingency, establish non-refundable earnest money or position your sellers in a firm non-contingent purchase agreement, clear wording in the purchase agreement is important.
 
 
 
   
PA Clause:  Specific Lender Association ~ Pre-Approval Letter
   
  "Buyer acknowledges that as a material inducement to Seller accepting Buyer's offer to purchase the property, Buyer has presented a pre-approval letter from ____________: Buyer hereby agrees that Buyer shall not change lenders with out the written consent of Seller.  In addition to any other remedies for default and notwithstanding any provisions to the contrary under this Purchase Agreement, if Buyer changes lenders without Seller's written consent and the parties fail to close on the date specified on page one (1) of this Purchase Agreement for any reason related to financing, Seller may, at Seller's option, declare this Purchase Agreement cancelled.  If Seller declares the Purchase Agreement cancelled, the parties shall immediately sign a Cancellation of Purchase Agreement confirming the cancellation and directing the earnest money to be forfeited to Seller as liquidated damages."
   
   
P/A Clause:  Re-Write the Offer
   
 

It is agreed and understood that this purchase agreement supersedes the previously written purchase agreement, with a final acceptance date of __________, between the same buyers and sellers. 

This purchase agreement has been rewritten to accommodate changes in the buyers financing.
   
   
P/A Clause:  Time of Possession
   
 

"It is agreed and understood that possession shall be given to the buyers 24 hours after the funds are received, or the date and time specified on page _____ , line ____ of the purchase agreement, whichever is later."
   
   
Buyers Request to have offer presented in person
 
 

"We, ____________________, prospective buyers of your property, request that our agent, ______________, personally present our purchase agreement to you and your licensed representative.  We believe that our agent can provide you with answers and information that will help you make an informed decision regarding the sale of your home."
   
  For a printable page of the above request: Click Here
   
   
Double Contingency   (Property Inspection & Sale of Buyer's Property)
   
 

"It is understood that this purchase agreement is contingent upon both a property inspection as well as the sale of the buyer’s property.  For details see the respective contingency addendums.  

It is agreed and understood that the inspection contingency shall begin upon the date of final acceptance of this purchase agreement which shall be prior to removal of the buyer’s home sale contingency.

In the event the seller serves the buyer with a request for removal of contingency, and the buyer is unable to perform and therefore is required to sign a cancellation, it agreed and understood that the seller shall reimburse the buyer $_____ towards the cost of the inspection. 

It is further understood that upon receipt of reimbursement, the buyer agrees to release the entire inspection report to the seller."
   
   
Buyers Unilateral Removal of Inspection Contingency
   
  "With respect to the inspection contingency: It is agreed and understood that the buyers have completed their inspection of the property.  The buyers have no issues associated with said inspection and hereby unilaterally remove the inspection contingency."
   
   
Sell High ~ Buy Low 
    Click Here for the "Seller’s Home Purchase Contingency" Presentation Page
   
(1) "It is agreed and understood that this purchase agreement is accepted subject to the Sellers [seller’s name] entering into a binding purchase agreement on the home of their choice on or before [Date]. 
   
(2) It is further agreed and understood that upon acceptance of this purchase agreement, the seller shall remove their property from the active market by placing it into pending status on the MLS.*
   
(3)  In the event the sellers do not enter into a valid purchase agreement on the home of their choice by the above stated date, than this purchase agreement shall be either:
  A) Extended by written agreement of both buyer and seller, or

  B) Accepted by the seller by removing, in writing, this home
       purchase contingency, or
  C) Declared null and void by the seller, in which case all parties agree
       to sign a cancellation returning all earnest money to the buyers.**
   
  *(Alternate phraseology for the 2nd paragraph.)
   
 

"It is further agreed and understood that the seller’s property shall remain on the market during this home purchase contingency.  This accepted purchase agreement between the sellers [seller’s name] and the buyers [buyer’s name] shall be in first position.  Any other offers accepted by the sellers and a different buyer shall be in second position, subject to successful cancellation of this purchase agreement."
   
  **(Alternate phraseology for the 3rd paragraph.)
   
  In the event the sellers do not enter into a valid purchase agreement on the home of their choice by the above stated date, than it is agreed that the buyer and seller shall attempt to renegotiate the timeline associated with this 'seller's home purchase contingency'.  However it is also understood that either party may unilaterally declare this purchase agreement null and void, in which case all parties agree to sign a cancellation returning all earnest money to the buyers.
   
   
Future Phraseology...
   
Acknowledgement and Acceptance of Buyers Underwriting Approval (i.e. Box 2) 
   
   
Tips on a writing a good contingency
   
   
Earnest Money
   
   
2nd Opinion Contingency
   
   
P/A Clause:  Firm up a buyers non-contingent purchase agreement.
  Situation:  You're representing the seller, you receive a non-contingent purchase agreement from a buyer who has just sold their home. 

The buyer's agent tells you that  while the purchase agreement is non-contingent, the buyers are pulling the equity from their sale as part of the down payment on the purchase of your sellers home.

The buyer's agent also informs you that the buyers of your buyers home have not been through underwriting and the P/A on your buyer's home will not be made available to you.

This puts you in a position where you are 'blind'.  You're relying on verbal representation from an agent you don't know, on a transaction that  you are one generation removed from.  How do you address this in the purchase agreement on your sellers home.