Protect yourself when buying or selling goods: Purchase Agreement
What we’ll cover
What is a Purchase Agreement?
A Purchase Agreement is a two-sided legal document that outlines a sales agreement for goods. Purchase Agreements are more than simple sales receipts or Bills of Sale. While they include the basics, such as what item is being sold and the purchase price, they also include protections for the buyer and seller.
A Purchase Agreement can be used to document the sale and purchase of nearly any type of good, but is not used when the sellable item is a service. It is most often used in larger transactions, such as real estate, or even to purchase business assets or vehicles. This contract is also commonly used when selling/purchasing jewelry, artwork, or guns (where allowed).
Also referred to as a Sales Contract or Purchase Contract, it can require that the buyer acknowledges, in writing, that they have the right to sell the property and that it does not have a lien or other burdens that would interfere with the sale. Get started on your Purchase Agreement with Rocket Lawyer now – it’s as simple as answering a few questions.
When to use a Purchase Agreement:
- You are looking to sell goods (such as real estate, business assets, vehicles, etc.) and want the sale properly documented.
- You're looking to buy goods and you want the sale in writing in order to make sure you’re protected.
Sample Purchase Agreement
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Purchase Agreement
hereby sell, assign, and transfer to
This transfer is effective as of .
The property is now located at , and all of such property is in the possession of .
[SIGNATURE PAGE FOLLOWS]
This Purchase Agreement shall be signed by on behalf of , and by on behalf of .
SELLER:
| By: | Date: |
BUYER:
| By: | Date: |
About Purchase Agreements
Learn about how to protect yourself when buying or selling goods
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What are the common terms in a Purchase Agreement?
A Purchase Agreement, also known as a Sales Agreement or Contract of Sale, typically includes various terms and clauses to outline the terms and conditions of a transaction.
While the specific terms can vary based on the nature of the purchase (e.g., real estate, business, general goods, etc.), here are common topics you may come across when making your Purchase Agreement:
Parties
Thoroughly identifies both parties involved in the transaction.
Description of the goods
Clearly describes the item(s) being sold, including any specifications or relevant details.
Purchase price
Specifies the total amount of money the buyer agrees to pay for the property or goods.
Payment terms
Outlines the terms of payment, including the amount of any initial deposit, installment payments, and the due date for the final payment.
Title and ownership (when applicable)
Addresses the transfer of legal ownership and ensures that the seller has clear title to the property or goods.
Condition of the goods
Specifies the condition in which the property or goods should be delivered.
Closing date and costs
Specifies the date on which the transaction is expected to be completed and which party is responsible for various closing costs, such as taxes, fees, and other expenses associated with the transfer of ownership.
Dispute resolution
Describes the process for resolving disputes, whether through negotiation, mediation, or arbitration.
Representation and warranties (when applicable)
Outlines the statements made by the seller about the property or goods and any guarantees regarding their condition.
If you’d like anything more specific addressed in your Purchase Agreement with Rocket Lawyer, you can always consult with a Rocket Legal Pro!
Purchase Agreement FAQs
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What is a Purchase Agreement used for?
A Purchase Agreement can be used to document the sale and purchase of nearly any type of good. This contract is not used when the sellable item is a service. It is most often used in larger transactions because it offers some protection for the buyer and seller. Also referred to as a Purchase Contract, it can be used in real estate transactions or to purchase business assets or vehicles. It can also be used when selling/purchasing jewelry, artwork, or guns (where allowed).
This Purchase Agreement is for general purposes, but we also offer contracts for specific uses, such as:
- Purchase Agreement for Personal Property.
- Property Sale Agreement.
- Business Sale Agreement.
- Stock Purchase Agreement.
- Franchise Purchase Agreement.
- Asset Purchase Agreement.
- Real Estate Purchase Agreement.
If you are selling a service, check out our essential service contracts.
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How do I make a Purchase Agreement?
You can create a Purchase Agreement for free with Rocket Lawyer. Use the Purchase Agreement document if:
- You're buying property and want written proof of the agreement.
- You want assurance that the seller has the legal right to sell the property.
- As the seller, you want to document payment agreements.
This Purchase Agreement document can be used to make a Purchase Contract (or Sales Contract) between individuals, married couples, businesses, or trusts. Rocket Lawyer's document builder can make a Purchase Agreement suitable for any state.
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What information do I need to make a Purchase Agreement?
The Rocket Lawyer document builder is easy to use. You simply submit a bit of information and the legal language is automatically generated for you. Documents are created according to the state where the property is located.
You may need to submit the following information to make your Purchase Agreement:
- Buyer and seller information such as name, address, and whether they are an individual, business, or trust.
- What is being sold or a legal description of the property.
- Purchase price, amount of earnest money, and whether the buyer will be acquiring financing.
- Whether the property is asserted to be free of liens or other encumbrances.
- If the seller will be making any warranties of the property.
- Closing date, when the final payment is due, and when property will be transferred.
- The number of days the closing date can be extended.
- Whether there needs a lead-paint disclosure (if home or building).
Please note: Documents vary depending on the state. If the generated document doesn't seem to fit your needs, you may want to try one of the more specific Purchase Agreements listed above.
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What is the difference between a Purchase Agreement and a Bill of Sale?
A Bill of Sale documents a transfer of property and often an exchange of money. A Purchase Agreement, on the other hand, is usually made before money is exchanged and includes specific requirements both the seller and the buyer must meet before the property ownership is transferred. For example, if you need to ensure that the seller has the right to sell the property that they are offering, a Purchase Agreement includes those provisions. You might opt to use a Bill of Sale if you paid for a used car, have the signed-over title in hand, and will be requesting a title transfer from the DMV.
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Do I need a lawyer to make a Purchase Agreement?
No, you do not. You can make a Purchase Agreement (also called a Purchase Contract) using Rocket Lawyer and have it signed by the appropriate parties to make it valid. If you feel it adds extra assurance, you can ask for a witness signature or an Affidavit that declares that the signer saw you and the other party sign the document. If the Purchase Agreement is for a large purchase, such as for a real estate or business purchase, you may benefit from having a lawyer look over the document before it is signed as an added layer of protection. In the event of a dispute, a lawyer can help you file for damages.
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How long is a Purchase Agreement valid?
A Purchase Agreement for real estate can and may include a date for when the agreement expires.
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Do I have to pay taxes on items sold person-to-person?
In most cases, yes. The IRS and your local tax agency expect you to report any gain on property sold, you can also deduct losses. You are expected to pay your tax obligation on personal property you sell such as real estate, land, vehicles, or other assets. To learn more, see "Do I Need to Pay Taxes on Private Sales Transactions?"
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How do I get a Real Estate Purchase Agreement?
Creating a Real Estate Purchase Agreement is a fairly straightforward process. Rocket Lawyer can help you create a custom contract to buy or sell real estate.
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