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Real Estate Purchase Agreement: Essential Guide for Landlords, Investors, and Tenants

Comprehensive guide to understanding real estate purchase agreements for tenants living in properties being sold, real estate investors with multiple rentals, and individual landlords selling rental properties.

Introduction

A Real Estate Purchase Agreement is a legally binding contract that outlines the terms and conditions of a property sale between a buyer and seller. Whether you're a tenant concerned about your living situation when your landlord decides to sell, a real estate investor expanding your portfolio, or a landlord looking to sell your rental property, understanding this document is crucial to protecting your interests and ensuring a smooth transaction. This guide breaks down the key components of a Real Estate Purchase Agreement and provides specific insights for tenants, investors, and landlords navigating property sales.

Key Things to Know

  1. 1

    A Real Estate Purchase Agreement is legally binding once signed by all parties, so review it carefully or have an attorney review it before signing.

  2. 2

    Tenants generally maintain their rights under existing leases when a property is sold, as the new owner must honor the terms until the lease expires.

  3. 3

    Contingencies protect buyers by allowing them to back out of the deal under specific circumstances without losing their earnest money.

  4. 4

    Landlords selling rental properties must disclose existing leases, security deposits, and any known property defects to potential buyers.

  5. 5

    Real estate investors should include contingencies for reviewing tenant payment histories, lease agreements, and property financial records.

  6. 6

    The purchase agreement should clearly state whether the property will be delivered vacant or with tenants in place at closing.

  7. 7

    Security deposits must be transferred from the seller to the buyer at closing, with proper accounting and notification to tenants.

  8. 8

    Financing for investment properties typically requires larger down payments and carries higher interest rates than primary residence loans.

  9. 9

    Local landlord-tenant laws may impact how a property sale can proceed, including requirements for tenant notification and rights of first refusal.

  10. 10

    Tax implications of selling rental property differ significantly from selling a primary residence, including potential capital gains tax and depreciation recapture.

Key Decisions

Individual Landlord Selling a Rental Property

Real Estate Investor with Multiple Rental Properties

Tenant Living in a Property Being Sold

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REAL ESTATE PURCHASE AGREEMENT

This Real Estate Purchase Agreement (the "Agreement") is made and entered into as of [DATE] (the "Effective Date"), by and between the parties identified below.

1. PARTIES

Seller(s): [SELLER NAME(S)] (collectively, the "Seller"), with a current address of [SELLER ADDRESS], [SELLER CITY], [SELLER STATE] [SELLER ZIP], telephone number [SELLER PHONE], and email address [SELLER EMAIL].

Buyer(s): [BUYER NAME(S)] (collectively, the "Buyer"), with a current address of [BUYER ADDRESS], [BUYER CITY], [BUYER STATE] [BUYER ZIP], telephone number [BUYER PHONE], and email address [BUYER EMAIL].

2. PROPERTY DESCRIPTION

2.1 Real Property

Seller agrees to sell and Buyer agrees to purchase the real property located at [PROPERTY ADDRESS], [PROPERTY CITY], [PROPERTY STATE] [PROPERTY ZIP] (the "Property"), legally described as follows:

[LEGAL DESCRIPTION OF PROPERTY]

Assessor's Parcel Number (APN): [PARCEL NUMBER] Approximate lot size: [LOT SIZE]

Together with all rights, privileges, easements, and appurtenances pertaining thereto, including but not limited to: water rights, mineral rights, development rights, air rights, rights-of-way, and easements of record, if any, unless specifically excluded in this Agreement.

2.2 Known Encumbrances and Easements

The Property is subject to the following known encumbrances and easements: [LIST OF ENCUMBRANCES AND EASEMENTS]

2.3 Personal Property Included

The following items of personal property are permanently installed and included in the purchase price, free of liens and without warranty of condition unless otherwise stated:

a) All existing built-in appliances, including but not limited to: [LIST BUILT-IN APPLIANCES] b) All attached floor coverings, including carpet, vinyl, ceramic tile, wood, and laminate flooring c) All window coverings, including blinds, curtains, drapes, and shutters, along with their hardware d) All attached light fixtures and ceiling fans e) All attached media equipment, including wall mounts, speakers, and wiring f) All built-in cabinetry, shelving, and storage units g) All heating, ventilation, and air conditioning equipment h) All plumbing fixtures and equipment i) All electrical fixtures and equipment j) All security systems and equipment, whether leased or owned k) All landscaping, plants, and trees l) All mailboxes and permanently affixed outdoor decorations m) The following additional personal property: [LIST ADDITIONAL INCLUDED ITEMS]

2.4 Personal Property Excluded

The following items are specifically excluded from the sale: [LIST EXCLUDED ITEMS]

2.5 Leased Items

The following items are leased and not owned by Seller. Buyer will need to assume the lease or make other arrangements with the lessor: [LIST LEASED ITEMS]

3. PURCHASE PRICE AND FINANCING

3.1 Purchase Price

The total purchase price for the Property is [PURCHASE PRICE NUMERICAL] Dollars ($[PURCHASE PRICE NUMERICAL]) (the "Purchase Price").

3.2 Earnest Money Deposit

Buyer shall deposit earnest money in the amount of [EARNEST MONEY AMOUNT] Dollars ($[EARNEST MONEY AMOUNT]) (the "Earnest Money Deposit") with [ESCROW AGENT NAME] (the "Escrow Agent") within [NUMBER] business days after the Effective Date of this Agreement. The Earnest Money Deposit shall be applied toward the Purchase Price at closing.

3.2.1 Earnest Money Handling

The Earnest Money Deposit shall be held in a non-interest-bearing trust account by the Escrow Agent. If interest is earned on the deposit, such interest shall be disbursed in the same manner as the Earnest Money Deposit.

3.2.2 Earnest Money Disposition

The Earnest Money Deposit shall be: a) Applied to the Purchase Price at closing if the transaction closes; b) Returned to Buyer if Buyer terminates this Agreement pursuant to any right to terminate provided in this Agreement; c) Paid to Seller as liquidated damages if Buyer defaults under this Agreement; or d) Disbursed as otherwise provided in this Agreement or as directed by written agreement of Buyer and Seller.

3.3 Additional Deposits

Buyer shall make the following additional deposits to be held by the Escrow Agent and applied toward the Purchase Price at closing: a) [AMOUNT] Dollars ($[AMOUNT]) on or before [DATE] b) [AMOUNT] Dollars ($[AMOUNT]) on or before [DATE]

3.4 Financing Terms

This Agreement is (check one):

  • Not contingent upon Buyer obtaining financing.
  • Contingent upon Buyer obtaining financing as follows:

3.4.1 Loan Terms

Buyer shall apply for and diligently pursue obtaining a [TYPE OF LOAN] loan in the amount of [LOAN AMOUNT] Dollars ($[LOAN AMOUNT]), with an initial interest rate not to exceed [RATE]% per annum, for a term of not less than [TERM] years.

3.4.2 Loan Application

Buyer shall submit a complete application for the loan described above, including all required documentation, to a reputable lender within [NUMBER] business days after the Effective Date. Buyer shall diligently pursue loan approval and shall promptly provide any additional documentation requested by the lender.

3.4.3 Loan Contingency Deadline

Buyer shall obtain a written loan commitment or approval from a lender on the terms specified above, or terms acceptable to Buyer, on or before [DATE] (the "Loan Contingency Deadline"). If Buyer is unable to obtain such loan commitment or approval by the Loan Contingency Deadline despite Buyer's good faith efforts, Buyer may terminate this Agreement by providing written notice to Seller no later than [NUMBER] days after the Loan Contingency Deadline, and the Earnest Money Deposit shall be returned to Buyer. If Buyer fails to provide such notice by the deadline, this financing contingency shall be deemed waived.

3.5 Balance of Purchase Price

The balance of the Purchase Price, adjusted by prorations and closing costs as provided in this Agreement, shall be paid by Buyer to Escrow Agent in immediately available funds at or before closing.

4. CLOSING COSTS AND PRORATIONS

4.1 Closing Costs

Closing costs shall be allocated between Buyer and Seller as follows:

4.1.1 Seller's Closing Costs

Seller shall pay: a) The cost of preparing the deed and any related documents required to convey title to Buyer b) The cost of releasing any existing loans, liens, or encumbrances affecting the Property c) Seller's share of prorations as provided in this Agreement d) One-half of the Escrow Agent's fee e) Any transfer taxes, documentary stamps, or similar taxes imposed on the deed f) The cost of the title search and the owner's title insurance policy premium g) Any real estate brokerage commissions or fees as separately agreed by Seller h) [OTHER SELLER CLOSING COSTS]

4.1.2 Buyer's Closing Costs

Buyer shall pay: a) The cost of recording the deed b) The cost of any lender's title insurance policy c) All costs associated with Buyer's financing, including but not limited to loan origination fees, discount points, credit report fees, appraisal fees, and mortgage recording taxes d) Buyer's share of prorations as provided in this Agreement e) One-half of the Escrow Agent's fee f) The cost of any survey required by Buyer or Buyer's lender g) [OTHER BUYER CLOSING COSTS]

4.2 Prorations

The following items shall be prorated between Buyer and Seller as of the date of closing:

4.2.1 Property Taxes

Real estate taxes for the current tax year shall be prorated based on the most recent available tax bill. If the closing occurs before the tax rate is fixed for the current year, the proration shall be based on the prior year's tax rate. Any supplemental tax bills received after closing for periods prior to closing shall be the responsibility of Seller.

4.2.2 Homeowners' Association Dues

Any homeowners' association or condominium association dues shall be prorated as of the date of closing based on the most recent statement from the association.

4.2.3 Utility Charges

Utility charges for which Seller is responsible shall be prorated as of the date of closing based on the most recent utility bills. Seller shall be responsible for notifying utility companies of the change in ownership and requesting final readings as of the date of closing.

4.2.4 Rental Income

If the Property is subject to any leases, all rent actually collected by Seller for the month of closing shall be prorated as of the date of closing. Security deposits and advance rent paid by tenants shall be transferred to Buyer at closing.

4.2.5 Other Prorations

[OTHER ITEMS TO BE PRORATED]

4.2.6 Post-Closing Adjustments

If any errors or omissions are made regarding adjustments and prorations, the parties shall make the appropriate corrections promptly upon discovery. This provision shall survive closing.

5. CONTINGENCIES

5.1 Inspection Contingency

5.1.1 Inspection Period

Buyer shall have [NUMBER] days from the Effective Date (the "Inspection Period") to conduct, at Buyer's expense, any inspections, tests, surveys, and other studies of the Property that Buyer deems necessary or desirable.

5.1.2 Scope of Inspections

Buyer and Buyer's authorized representatives may enter the Property at reasonable times for the purpose of conducting inspections, provided that Buyer gives Seller reasonable notice. Inspections may include, but are not limited to: a) General home inspection b) Pest/termite inspection c) Radon testing d) Mold testing e) Lead-based paint inspection (for properties built before 1978) f) Structural engineering inspection g) Roof inspection h) HVAC inspection i) Electrical system inspection j) Plumbing system inspection k) Environmental hazards assessment l) Boundary survey m) Soil tests n) Well and septic inspections (if applicable)

5.1.3 Inspection Results

If Buyer is dissatisfied with the results of any inspection, Buyer may, prior to the expiration of the Inspection Period: a) Accept the Property in its current condition; b) Terminate this Agreement by providing written notice to Seller, in which case the Earnest Money Deposit shall be returned to Buyer; or c) Submit to Seller a written request for repairs or a reduction in the Purchase Price, along with copies of relevant inspection reports.

5.1.4 Seller's Response to Repair Requests

If Buyer requests repairs or a price reduction, Seller shall respond in writing within [NUMBER] days after receipt of Buyer's request. Seller may agree to all, some, or none of Buyer's requests. If Seller agrees to all of Buyer's requests, this contingency shall be deemed satisfied. If Seller does not agree to all of Buyer's requests, Buyer shall have [NUMBER] days after receipt of Seller's response to: a) Accept Seller's response and proceed with the transaction; b) Negotiate with Seller regarding the requested repairs or price reduction; or c) Terminate this Agreement by providing written notice to Seller, in which case the Earnest Money Deposit shall be returned to Buyer.

5.1.5 Waiver of Inspection Contingency

If Buyer fails to conduct inspections or provide written notice of dissatisfaction prior to the expiration of the Inspection Period, this inspection contingency shall be deemed waived.

5.2 Appraisal Contingency

5.2.1 Appraisal Requirement

This Agreement is contingent upon the Property appraising for no less than the Purchase Price. Buyer shall promptly order an appraisal of the Property to be performed by a licensed or certified appraiser.

5.2.2 Appraisal Deadline

The appraisal contingency shall remain in effect until [DATE] (the "Appraisal Deadline").

5.2.3 Low Appraisal

If the Property appraises for less than the Purchase Price, Buyer shall, no later than the Appraisal Deadline: a) Waive the appraisal contingency and proceed with the transaction; b) Terminate this Agreement by providing written notice to Seller, in which case the Earnest Money Deposit shall be returned to Buyer; or c) Request in writing that Seller reduce the Purchase Price to the appraised value.

5.2.4 Seller's Response to Price Reduction Request

If Buyer requests a reduction in the Purchase Price pursuant to Section 5.2.3(c), Seller shall respond in writing within [NUMBER] days after receipt of Buyer's request. If Seller agrees to reduce the Purchase Price to the appraised value, the parties shall proceed with the transaction at the reduced price. If Seller does not agree to reduce the Purchase Price, Buyer shall, within [NUMBER] days after receipt of Seller's response: a) Waive the appraisal contingency and proceed with the transaction at the original Purchase Price; or b) Terminate this Agreement by providing written notice to Seller, in which case the Earnest Money Deposit shall be returned to Buyer.

5.2.5 Waiver of Appraisal Contingency

If Buyer fails to provide written notice of a low appraisal prior to the Appraisal Deadline, this appraisal contingency shall be deemed waived.

5.3 Title Contingency

5.3.1 Title Commitment

Seller shall, at Seller's expense, cause a title company to issue a commitment for an owner's policy of title insurance (the "Title Commitment") in the amount of the Purchase Price, showing title to the Property vested in Seller, subject only to: a) Standard printed exceptions; b) General taxes for the current year; c) Easements, restrictions, and reservations of record that do not materially interfere with Buyer's intended use of the Property; d) Rights of tenants in possession as disclosed in this Agreement; and e) Any other matters specifically approved by Buyer in writing.

5.3.2 Title Review Period

Buyer shall have [NUMBER] days after receipt of the Title Commitment and copies of all exceptions referenced therein (the "Title Review Period") to review and object to any matters shown in the Title Commitment that Buyer finds unacceptable (the "Title Objections").

5.3.3 Title Objections

If Buyer has Title Objections, Buyer shall deliver written notice of such Title Objections to Seller prior to the expiration of the Title Review Period. Any matters shown in the Title Commitment to which Buyer does not object shall be deemed accepted by Buyer.

5.3.4 Seller's Response to Title Objections

Seller shall respond in writing to Buyer's Title Objections within [NUMBER] days after receipt thereof, indicating which Title Objections Seller is willing to cure before closing. Seller shall use commercially reasonable efforts to cure the Title Objections that Seller has agreed to cure. If Seller fails to respond within the specified time period, Seller shall be deemed to have elected not to cure any of the Title Objections.

5.3.5 Buyer's Right to Terminate

If Seller is unwilling or unable to cure all of Buyer's Title Objections, Buyer shall, within [NUMBER] days after receipt of Seller's response (or after the deadline for Seller's response if no response is received): a) Waive the uncured Title Objections and proceed with the transaction; or b) Terminate this Agreement by providing written notice to Seller, in which case the Earnest Money Deposit shall be returned to Buyer.

5.3.6 Pre-Closing Title Update

Prior to closing, Buyer may obtain an update to the Title Commitment. If the update reveals any new material title defects not shown in the original Title Commitment, Buyer shall promptly notify Seller, and the procedures set forth above shall apply to such new title defects.

5.4 Sale of Buyer's Property Contingency

5.4.1 Contingent on Sale

This Agreement is contingent upon the closing of the sale of Buyer's current property located at [BUYER'S CURRENT PROPERTY ADDRESS] (the "Buyer's Property") on or before [DATE] (the "Sale Deadline").

5.4.2 Status Updates

Buyer shall provide Seller with written updates on the status of the sale of Buyer's Property every [NUMBER] days until Buyer's Property is sold or this contingency is otherwise resolved.

5.4.3 Termination Right

If the sale of Buyer's Property does not close by the Sale Deadline, Buyer may, within [NUMBER] days after the Sale Deadline: a) Waive this contingency and proceed with the transaction; or b) Terminate this Agreement by providing written notice to Seller, in which case the Earnest Money Deposit shall be returned to Buyer.

5.4.4 Kick-Out Clause

Notwithstanding the foregoing, Seller shall have the right to continue to market the Property while this contingency is in effect. If Seller receives another bona fide offer to purchase the Property that Seller wishes to accept, Seller shall give written notice to Buyer (the "Kick-Out Notice"). Buyer shall then have [NUMBER] hours after receipt of the Kick-Out Notice to: a) Waive this contingency in writing and provide proof of funds or financing sufficient to close without the sale of Buyer's Property; or b) Terminate this Agreement, in which case the Earnest Money Deposit shall be returned to Buyer.

If Buyer fails to respond to the Kick-Out Notice within the specified time period, this Agreement shall automatically terminate, and the Earnest Money Deposit shall be returned to Buyer.

5.5 Homeowners' Association Document Review

5.5.1 Document Delivery

If the Property is subject to a homeowners' association, condominium association, or similar organization (the "Association"), Seller shall, within [NUMBER] days after the Effective Date, provide Buyer with copies of the following documents (collectively, the "Association Documents"): a) Declaration of covenants, conditions, and restrictions b) Bylaws and rules of the Association c) Articles of incorporation of the Association d) Financial statements of the Association for the past two years e) Minutes of board meetings and membership meetings for the past 12 months f) Current budget and most recent assessment statement g) Notice of any pending special assessments or litigation involving the Association h) Certificate from the Association stating that all assessments have been paid current i) Any other documents reasonably requested by Buyer

5.5.2 Review Period

Buyer shall have [NUMBER] days after receipt of all Association Documents (the "Review Period") to review and approve or disapprove the Association Documents.

5.5.3 Disapproval Right

If Buyer disapproves of any Association Documents, Buyer may, prior to the expiration of the Review Period, terminate this Agreement by providing written notice to Seller, in which case the Earnest Money Deposit shall be returned to Buyer.

5.5.4 Waiver

If Buyer fails to provide written notice of disapproval prior to the expiration of the Review Period, this contingency shall be deemed waived.

6. CLOSING AND POSSESSION

6.1 Closing Date

The closing shall take place on [CLOSING DATE] (the "Closing Date"), or such earlier date as may be mutually agreed upon by Buyer and Seller, at the offices of [CLOSING LOCATION] or such other location as may be mutually agreed upon by Buyer and Seller.

6.2 Closing Extensions

Either party may extend the Closing Date for up to [NUMBER] days by providing written notice to the other party at least [NUMBER] days prior to the scheduled Closing Date, provided that such extension is necessary due to circumstances beyond the requesting party's reasonable control. Any additional extensions shall require the written consent of both parties.

6.3 Possession

Seller shall deliver possession of the Property to Buyer (select one):

  • At closing
  • Within [NUMBER] days after closing (the "Post-Closing Occupancy Period")
  • On [POSSESSION DATE]

6.4 Post-Closing Occupancy

If possession is to be delivered after closing, the following terms shall apply:

6.4.1 Occupancy Agreement

Buyer and Seller shall enter into a separate post-closing occupancy agreement, which shall include the following terms: a) Seller shall pay Buyer rent in the amount of [DAILY RENT AMOUNT] Dollars ($[DAILY RENT AMOUNT]) per day for each day of the Post-Closing Occupancy Period. b) Seller shall maintain property insurance covering Seller's personal property and liability insurance during the Post-Closing Occupancy Period. c) Seller shall be responsible for utilities, maintenance, and repairs during the Post-Closing Occupancy Period. d) Seller shall indemnify and hold Buyer harmless from any claims, damages, or liabilities arising from Seller's occupancy.

6.4.2 Security Deposit

At closing, Seller shall deposit with Escrow Agent the sum of [SECURITY DEPOSIT AMOUNT] Dollars ($[SECURITY DEPOSIT AMOUNT]) as security for Seller's obligations under the post-closing occupancy agreement. The security deposit shall be refunded to Seller upon Seller's timely vacation of the Property in the condition required by this Agreement, less any amounts withheld for damages or unpaid rent.

6.5 Escrow Instructions

6.5.1 Opening of Escrow

Within [NUMBER] days after the Effective Date, the parties shall open an escrow account with [ESCROW AGENT NAME] (the "Escrow Agent") and deliver a copy of this Agreement to Escrow Agent.

6.5.2 Closing Documents

At or before closing, Seller shall deliver to Escrow Agent the following documents: a) A duly executed and acknowledged [TYPE OF DEED] deed conveying the Property to Buyer b) A bill of sale for any personal property included in the sale c) An affidavit of title or owner's affidavit in a form acceptable to the title company d) A Foreign Investment in Real Property Tax Act (FIRPTA) affidavit e) A completed 1099-S form or appropriate exemption certificate f) All keys, garage door openers, access codes, and similar items g) Any other documents reasonably necessary to complete the transaction

At or before closing, Buyer shall deliver to Escrow Agent: a) The balance of the Purchase Price in immediately available funds b) Executed loan documents if Buyer is obtaining financing c) Any other documents reasonably necessary to complete the transaction

6.5.3 Closing Procedure

Upon receipt of all required documents and funds, Escrow Agent shall: a) Record the deed and any other documents required to be recorded b) Issue the owner's policy of title insurance to Buyer c) Disburse funds in accordance with the closing statement approved by Buyer and Seller d) Deliver the originals or copies of all closing documents to the appropriate parties e) Take any other actions necessary to complete the closing

6.5.4 Closing Statement

Prior to closing, Escrow Agent shall prepare and deliver to Buyer and Seller a preliminary closing statement showing all financial aspects of the transaction, including the Purchase Price, Earnest Money Deposit, prorations, closing costs, and the net amount due from Buyer and to Seller at closing. Buyer and Seller shall review and approve the preliminary closing statement prior to closing.

7. PROPERTY CONDITION

7.1 Property Condition at Closing

7.1.1 General Condition

Seller shall deliver the Property to Buyer at closing in substantially the same condition as it was on the Effective Date, ordinary wear and tear excepted, and free of debris and personal property not included in the sale.

7.1.2 Mechanical Systems

All heating, cooling, plumbing, electrical, and other mechanical systems and related equipment included in the sale shall be in working order at closing, ordinary wear and tear excepted.

7.1.3 Utilities

All utilities serving the Property shall be operational at closing.

7.1.4 Damage Prior to Closing

If the Property is damaged by fire or other casualty prior to closing, the provisions of Section 9.3 shall apply.

7.2 Seller Disclosures

7.2.1 Property Disclosure Statement

Within [NUMBER] days after the Effective Date, Seller shall complete and deliver to Buyer a property disclosure statement in the form required by applicable law, disclosing all known material defects and other conditions of the Property.

7.2.2 Lead-Based Paint Disclosure

If the Property was built before 1978, Seller shall complete and deliver to Buyer a lead-based paint disclosure form as required by federal law, along with the EPA pamphlet entitled "Protect Your Family from Lead in Your Home."

7.2.3 Other Required Disclosures

Seller shall promptly complete and deliver to Buyer any other disclosures required by applicable federal, state, or local law, including but not limited to: a) [SPECIFIC STATE-REQUIRED DISCLOSURES] b) Disclosure of any known environmental hazards c) Disclosure of any known boundary disputes d) Disclosure of any known material defects not readily observable by Buyer

7.2.4 Subsequent Discoveries

If, after delivering the disclosures required by this Section, Seller becomes aware of any material defects or other conditions that should have been disclosed, Seller shall promptly provide Buyer with a written supplemental disclosure.

7.3 Final Walk-Through

7.3.1 Walk-Through Right

Buyer shall have the right to conduct a final walk-through inspection of the Property within [NUMBER] hours prior to closing to verify that: a) The Property is in the condition required by this Agreement b) Any repairs agreed to by Seller have been completed c) All included personal property is present d) All systems and appliances are in working order e) The Property is free of debris and personal property not included in the sale

7.3.2 Walk-Through Issues

If the final walk-through reveals any material failure of Seller to comply with Seller's obligations under this Agreement, Buyer shall promptly notify Seller. The parties shall attempt in good faith to resolve any such issues prior to closing. If the issues cannot be resolved prior to closing, the parties may: a) Delay closing for up to [NUMBER] days to allow time for resolution; b) Proceed with closing with an escrow holdback in an amount sufficient to address the issues; or c) Take such other action as the parties may agree.

8. REPRESENTATIONS AND WARRANTIES

8.1 Seller's Representations and Warranties

Seller represents and warrants to Buyer as of the Effective Date and as of the Closing Date:

a) Seller has full legal capacity and authority to execute and deliver this Agreement and to perform all obligations hereunder. b) Seller is the sole owner of the Property and has good and marketable title to the Property, subject only to matters disclosed in the Title Commitment. c) There are no pending or threatened condemnation proceedings, lawsuits, or administrative actions affecting the Property. d) Seller has not received any notice of zoning, building, fire, or health code violations that have not been corrected. e) All improvements to the Property were made in compliance with applicable laws and with all necessary permits and approvals. f) To the best of Seller's knowledge, there are no hazardous substances on or under the Property in violation of applicable environmental laws. g) To the best of Seller's knowledge, all mechanical systems and appliances included in the sale are in working order. h) Seller is not a "foreign person" as defined in the Foreign Investment in Real Property Tax Act. i) There are no leases, options, rights of first refusal, or other agreements affecting the Property except as disclosed in writing to Buyer. j) Seller has not entered into any contracts for services or improvements that will be binding on Buyer after closing except as disclosed in writing to Buyer. k) All information provided by Seller to Buyer regarding the Property is true, correct, and complete to the best of Seller's knowledge.

8.2 Buyer's Representations and Warranties

Buyer represents and warrants to Seller as of the Effective Date and as of the Closing Date:

a) Buyer has full legal capacity and authority to execute and deliver this Agreement and to perform all obligations hereunder. b) Buyer has sufficient funds to complete the purchase or has made arrangements to obtain sufficient funds at closing. c) There are no pending or threatened lawsuits, bankruptcy proceedings, or other matters that would prevent Buyer from completing the purchase. d) All information provided by Buyer to Seller in connection with this Agreement is true, correct, and complete.

8.3 Survival

The representations and warranties in this Section shall survive closing for a period of [NUMBER] months.

9. LEGAL PROVISIONS

9.1 Default Provisions

9.1.1 Buyer's Default

If Buyer defaults in the performance of any obligation under this Agreement, Seller may: a) Retain the Earnest Money Deposit as liquidated damages, which shall be Seller's sole and exclusive remedy; or b) Seek specific performance of this Agreement, including recovery of reasonable attorneys' fees and costs.

The parties agree that the Earnest Money Deposit is a reasonable estimate of Seller's damages in the event of Buyer's default and that retaining the Earnest Money Deposit as liquidated damages is not a penalty.

9.1.2 Seller's Default

If Seller defaults in the performance of any obligation under this Agreement, Buyer may: a) Terminate this Agreement and receive a refund of the Earnest Money Deposit, plus reimbursement for any out-of-pocket expenses incurred in connection with this Agreement, not to exceed [AMOUNT] Dollars ($[AMOUNT]); b) Seek specific performance of this Agreement, including recovery of reasonable attorneys' fees and costs; or c) Pursue any other remedies available at law or in equity.

9.2 Dispute Resolution

9.2.1 Mediation

If any dispute arises between Buyer and Seller regarding this Agreement, the parties shall first attempt to resolve the dispute through mediation before resorting to arbitration or litigation. The mediation shall be conducted by a mediator mutually agreed upon by the parties or, if the parties cannot agree, by a mediator selected by [MEDIATION SERVICE]. The cost of mediation shall be shared equally by Buyer and Seller.

9.2.2 Arbitration

If mediation does not resolve the dispute within [NUMBER] days after the first mediation session, the dispute shall be submitted to binding arbitration in accordance with the rules of the American Arbitration Association. The arbitration shall be conducted by a single arbitrator with experience in real estate matters. The arbitrator shall have the authority to award any remedy or relief that a court could order or grant, including specific performance of this Agreement. The cost of arbitration shall be shared equally by Buyer and Seller, but the arbitrator may award costs and attorneys' fees to the prevailing party.

9.2.3 Attorneys' Fees

In any action or proceeding to enforce this Agreement or any provision hereof, the prevailing party shall be entitled to recover reasonable attorneys' fees and costs, including attorneys' fees and costs incurred in connection with any appeal.

9.3 Risk of Loss

9.3.1 Minor Damage

If, prior to closing, the Property is damaged by fire or other casualty, but such damage does not exceed [PERCENTAGE]% of the Purchase Price (as determined by a qualified appraiser or insurance adjuster), this Agreement shall remain in full force and effect, and Seller shall either: a) Repair the damage before closing; or b) Credit Buyer at closing for the cost of repairing the damage, plus assign to Buyer all insurance proceeds payable for such damage.

9.3.2 Major Damage

If, prior to closing, the Property is damaged by fire or other casualty, and such damage exceeds [PERCENTAGE]% of the Purchase Price (as determined by a qualified appraiser or insurance adjuster), Buyer may: a) Terminate this Agreement by providing written notice to Seller within [NUMBER] days after receiving notice of the damage, in which case the Earnest Money Deposit shall be returned to Buyer; or b) Proceed with the transaction and receive a credit at closing for the cost of repairing the damage, plus an assignment of all insurance proceeds payable for such damage.

9.3.3 Condemnation

If, prior to closing, any portion of the Property is taken by eminent domain or becomes subject to a pending taking, Buyer may: a) Terminate this Agreement by providing written notice to Seller within [NUMBER] days after receiving notice of the taking, in which case the Earnest Money Deposit shall be returned to Buyer; or b) Proceed with the transaction and receive an assignment of all condemnation proceeds payable to Seller.

9.4 Assignment Rights

9.4.1 Buyer's Assignment Rights

Buyer may not assign this Agreement without Seller's prior written consent, which may be withheld in Seller's sole discretion, except that Buyer may assign this Agreement without Seller's consent to an entity that is owned or controlled by Buyer. Any assignment shall not release Buyer from liability under this Agreement unless specifically agreed to in writing by Seller.

9.4.2 Notice of Assignment

Buyer shall provide written notice of any assignment to Seller at least [NUMBER] days prior to closing, along with the name, address, and contact information of the assignee and evidence of the assignee's ability to complete the transaction.

9.5 Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of [STATE], without giving effect to principles of conflicts of law.

9.6 Time is of the Essence

Time is of the essence with respect to all provisions of this Agreement that specify a time for performance.

9.7 Severability

If any provision of this Agreement, or any portion thereof, is held to be invalid, illegal, void, or unenforceable by any court or tribunal of competent jurisdiction, the remainder of this Agreement shall remain in full force and effect to the maximum extent permitted by law. The parties agree that any such invalid, illegal, void, or unenforceable provision shall be modified and limited in its effect to the extent necessary to cause it to be enforceable, or if such modification is not possible, shall be deemed severed from this Agreement. In such event, the parties shall negotiate in good faith to replace any invalid, illegal, void, or unenforceable provision with a valid, legal, and enforceable provision that corresponds as closely as possible to the parties' original intent and economic expectations. The invalidity or unenforceability of any provision in one jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction.

9.8 Entire Agreement

This Agreement, including any attachments and exhibits, constitutes the entire agreement between Buyer and Seller concerning the subject matter hereof and supersedes all prior agreements, understandings, negotiations, and discussions, whether oral or written. There are no warranties, representations, agreements, or promises pertaining to this Agreement or the Property not expressly set forth herein.

9.9 Amendments

This Agreement may be amended only by a written instrument executed by both Buyer and Seller.

9.10 Notices

All notices required or permitted under this Agreement shall be in writing and shall be delivered personally, by overnight courier, by certified mail, return receipt requested, or by email with confirmation of receipt, to the addresses set forth below:

If to Seller: [SELLER NAME] [SELLER ADDRESS] [SELLER EMAIL]

If to Buyer: [BUYER NAME] [BUYER ADDRESS] [BUYER EMAIL]

Notices shall be deemed received upon actual receipt or refusal of delivery. Either party may change its address for notices by providing written notice to the other party.

9.11 Counterparts and Electronic Signatures

This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Electronic signatures, including signatures transmitted by email or other electronic means, shall be valid and binding as original signatures.

9.12 Survival

The provisions of this Agreement that contemplate performance after closing, including but not limited to representations, warranties, indemnities, and obligations relating to post-closing adjustments, shall survive closing and shall not be merged into the deed or other closing documents.

10. SPECIAL CONSIDERATIONS

10.1 Tenant Rights

10.1.1 Existing Leases

The Property is subject to the following leases or rental agreements: [LIST OF EXISTING LEASES]

10.1.2 Security Deposits

At closing, Seller shall transfer to Buyer all security deposits held by Seller under the existing leases, along with a detailed accounting of such deposits.

10.1.3 Tenant Estoppel Certificates

Seller shall use commercially reasonable efforts to obtain and deliver to Buyer, at least [NUMBER] days prior to closing, estoppel certificates from all tenants, confirming the terms of their leases, the amount of security deposits, and that there are no defaults by either landlord or tenant.

10.1.4 Tenant Notifications

Seller shall, within [NUMBER] days after closing, notify all tenants in writing of the change in ownership and provide contact information for Buyer or Buyer's property manager.

10.2 Rental Property Financials

10.2.1 Income and Expense Statements

Seller shall provide Buyer with accurate income and expense statements for the Property for the past [NUMBER] years and year-to-date statements for the current year, including: a) Rent rolls showing tenant names, unit numbers, lease terms, and rental rates b) Records of all security deposits c) Utility bills d) Property tax bills e) Insurance premiums f) Maintenance and repair expenses g) Capital improvements h) Management fees i) Any other operating expenses

10.2.2 Verification of Rental Income

Buyer shall have the right to verify rental income by reviewing Seller's bank statements, tax returns, and other financial records related to the Property.

10.2.3 Tenant Payment History

Seller shall provide Buyer with a tenant payment history for the past [NUMBER] months, showing any late payments, defaults, or other issues.

10.3 Property Management Transition

10.3.1 Management Records

At closing, Seller shall deliver to Buyer all property management records, including: a) Original leases and lease applications b) Tenant files, including correspondence and notices c) Maintenance records and warranties d) Service contracts e) Vendor contact information f) Keys, access cards, and security codes

10.3.2 Service Contracts

Seller shall provide Buyer with copies of all service contracts affecting the Property. Buyer shall notify Seller in writing at least [NUMBER] days prior to closing which service contracts Buyer wishes to assume. Seller shall terminate all other service contracts effective as of the Closing Date.

10.3.3 Security Deposit Transfer

Seller shall transfer all security deposits to Buyer at closing, either by: a) A credit to Buyer on the closing statement; or b) A separate certified or cashier's check payable to Buyer.

10.4 Lead-Based Paint Disclosure

10.4.1 Lead Warning Statement

Every purchaser of any interest in residential real property on which a residential dwelling was built prior to 1978 is notified that such property may present exposure to lead from lead-based paint that may place young children at risk of developing lead poisoning. Lead poisoning in young children may produce permanent neurological damage, including learning disabilities, reduced intelligence quotient, behavioral problems, and impaired memory. Lead poisoning also poses a particular risk to pregnant women. The seller of any interest in residential real property is required to provide the buyer with any information on lead-based paint hazards from risk assessments or inspections in the seller's possession and notify the buyer of any known lead-based paint hazards. A risk assessment or inspection for possible lead-based paint hazards is recommended prior to purchase.

10.4.2 Seller's Disclosure

Seller's disclosure regarding lead-based paint and/or lead-based paint hazards (check one):

  • Seller has no knowledge of lead-based paint and/or lead-based paint hazards in the Property.
  • Seller has knowledge of lead-based paint and/or lead-based paint hazards in the Property, as follows: [DESCRIPTION OF LEAD-BASED PAINT HAZARDS]

10.4.3 Seller's Records

Seller's disclosure regarding records and reports available to Seller (check one):

  • Seller has no reports or records pertaining to lead-based paint and/or lead-based paint hazards in the Property.
  • Seller has provided Buyer with all available records and reports pertaining to lead-based paint and/or lead-based paint hazards in the Property, as follows: [LIST OF RECORDS AND REPORTS]

10.4.4 Buyer's Acknowledgment

Buyer acknowledges receipt of the above information, records, and reports (if any) and has been provided with the EPA pamphlet "Protect Your Family from Lead in Your Home."

10.5 Environmental Concerns

10.5.1 Known Environmental Issues

Seller discloses the following known environmental issues affecting the Property: [LIST OF KNOWN ENVIRONMENTAL ISSUES]

10.5.2 Environmental Testing

Buyer shall have the right, as part of Buyer's inspections, to conduct environmental testing of the Property, including but not limited to: a) Phase I environmental site assessment b) Radon testing c) Mold testing d) Asbestos testing e) Testing for underground storage tanks f) Soil and groundwater testing

10.5.3 Remediation Responsibility

If environmental testing reveals the presence of hazardous substances or conditions that violate applicable environmental laws, the cost of remediation shall be: a) Paid by Seller, up to a maximum of [AMOUNT] Dollars ($[AMOUNT]); or b) If the cost exceeds such amount, at Seller's option, either paid by Seller or this Agreement may be terminated by either party, in which case the Earnest Money Deposit shall be returned to Buyer.

10.6 Homeowner's Association Information

10.6.1 Association Details

The Property is subject to the following homeowner's association or condominium association: Name of Association: [ASSOCIATION NAME] Contact Information: [ASSOCIATION CONTACT] Current Monthly/Annual Dues: [DUES AMOUNT] Special Assessments: [SPECIAL ASSESSMENTS]

10.6.2 Association Approval

This sale (check one):

  • Is not subject to approval by the Association.
  • Is subject to approval by the Association, which shall be obtained by [RESPONSIBLE PARTY] within [NUMBER] days after the Effective Date.

10.6.3 Transfer Fees

Any Association transfer fees or capital contributions required upon transfer of the Property shall be paid by [RESPONSIBLE PARTY].

10.7 Condominium or Co-op Specific Terms

10.7.1 Unit Information

Unit Number: [UNIT NUMBER] Building/Phase: [BUILDING/PHASE] Parking Space(s): [PARKING SPACES] Storage Unit(s): [STORAGE UNITS]

10.7.2 Common Elements

The sale includes the Unit and an undivided interest in the common elements as specified in the declaration of condominium or proprietary lease.

10.7.3 Board Approval

This sale (check one):

  • Is not subject to board approval.
  • Is subject to approval by the board of directors or board of managers, which shall be obtained by [RESPONSIBLE PARTY] within [NUMBER] days after the Effective Date.

10.7.4 Right of First Refusal

This sale (check one):

  • Is not subject to any right of first refusal.
  • Is subject to a right of first refusal held by [RIGHT HOLDER], which shall be waived or exercised within [NUMBER] days after notice.

10.8 New Construction Provisions

10.8.1 Construction Specifications

The Property is to be constructed in accordance with the plans and specifications attached hereto as Exhibit [EXHIBIT NUMBER].

10.8.2 Construction Timeline

Seller shall commence construction within [NUMBER] days after the Effective Date and shall substantially complete construction within [NUMBER] days thereafter, subject to delays caused by force majeure events.

10.8.3 Construction Inspections

Buyer shall have the right to inspect the Property during construction at reasonable times and with reasonable notice to Seller. Buyer shall not interfere with construction activities during such inspections.

10.8.4 Pre-Closing Inspection

Buyer shall have the right to conduct a pre-closing inspection of the completed Property with Seller's representative. Buyer shall prepare a punch list of any incomplete or defective items, which Seller shall complete or correct within [NUMBER] days after closing.

10.8.5 Builder's Warranty

Seller shall provide Buyer with a builder's warranty covering defects in materials and workmanship for a period of [WARRANTY PERIOD] after closing.

11. ADDITIONAL PROVISIONS

[ADDITIONAL PROVISIONS]

12. SIGNATURES

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

SELLER:

[SELLER NAME] Date: _____________________________

[SELLER NAME] Date: _____________________________

BUYER:

[BUYER NAME] Date: _____________________________

[BUYER NAME] Date: _____________________________

EXHIBITS

Exhibit A: Legal Description of Property Exhibit B: Personal Property Inventory Exhibit C: [ADDITIONAL EXHIBITS AS NEEDED]

Arizona Requirements for Real Estate Purchase Agreement

Statute of Frauds (A.R.S. § 44-101)

Real estate contracts must be in writing to be enforceable under the Statute of Frauds, which requires certain contracts to be written and signed by the parties to be bound.

Property Disclosure Statement (A.R.S. § 33-422)

Sellers must provide a disclosure statement revealing known material defects that could affect the value or desirability of the property.

Lead-Based Paint Disclosure (42 U.S.C. § 4852d; 40 CFR Part 745)

For properties built before 1978, sellers must disclose known lead-based paint hazards and provide buyers with a 10-day period to conduct lead-based paint inspections.

Fair Housing Act Compliance (42 U.S.C. § 3601-3619)

Prohibits discrimination in the sale of housing based on race, color, religion, sex, disability, familial status, or national origin.

Earnest Money Deposit (A.R.S. § 32-2151)

Regulations governing the handling of earnest money deposits, including requirements for deposit into escrow or trust accounts.

Financing Contingency (A.R.S. § 32-2101 et seq.)

Provisions allowing buyers to make the purchase contingent upon obtaining financing, with specific timelines and requirements under Arizona law.

Title Insurance Requirements (A.R.S. § 20-1561 et seq.)

Requirements for title examination and insurance to protect buyers against defects in title that may affect ownership rights.

Escrow and Closing Procedures (A.R.S. § 6-801 et seq.)

Regulations governing escrow agents and the closing process, including documentation requirements and fund disbursement.

Foreign Investment in Real Property Tax Act (FIRPTA) (26 U.S.C. § 1445)

Requires withholding of a portion of the sale price when the seller is a foreign person, with specific filing and reporting requirements.

Homeowners Association Disclosure (A.R.S. § 33-1806 and § 33-1260)

Sellers must provide buyers with information about homeowners associations, including CC&Rs, bylaws, and financial information.

Inspection Period and Rights (A.R.S. § 32-2101 et seq.)

Provisions allowing buyers to inspect the property within a specified timeframe and potentially terminate the contract based on inspection findings.

Real Estate Settlement Procedures Act (RESPA) (12 U.S.C. § 2601 et seq.)

Federal law governing the settlement process, including disclosure requirements for closing costs and prohibition of kickbacks.

Truth in Lending Act (TILA) (15 U.S.C. § 1601 et seq.)

Requires lenders to provide borrowers with clear information about loan terms and costs, affecting financing aspects of real estate transactions.

Deed Preparation and Recording (A.R.S. § 33-401 et seq.)

Requirements for the preparation, execution, and recording of deeds transferring real property ownership.

Property Tax Proration (A.R.S. § 42-17151 et seq.)

Provisions for the fair allocation of property tax liability between buyer and seller based on the date of closing.

Landlord-Tenant Provisions (A.R.S. § 33-1301 et seq.)

When selling tenant-occupied property, the agreement must address existing leases and tenant rights under Arizona's Residential Landlord and Tenant Act.

Americans with Disabilities Act Compliance (42 U.S.C. § 12101 et seq.)

For commercial properties, disclosure of compliance status with accessibility requirements under the ADA.

Water Rights Disclosure (A.R.S. § 33-422)

In Arizona, disclosure of water rights associated with the property, particularly important for rural and agricultural properties.

Dispute Resolution Mechanisms (A.R.S. § 12-1501 et seq.)

Provisions for handling disputes through mediation, arbitration, or litigation, subject to Arizona's laws governing alternative dispute resolution.

Electronic Signatures (15 U.S.C. § 7001 et seq.; A.R.S. § 44-7001 et seq.)

Recognition of electronic signatures and records in real estate transactions under both federal and Arizona law.

Frequently Asked Questions

A comprehensive Real Estate Purchase Agreement typically includes: (1) Names and contact information of all parties involved; (2) Detailed property description including address and legal description; (3) Purchase price and financing terms; (4) Earnest money deposit amount and terms; (5) Closing date and possession details; (6) Property condition disclosures; (7) Contingencies such as financing, inspection, and appraisal; (8) Provisions for existing tenants; (9) Allocation of closing costs; (10) Default remedies; and (11) Signatures of all parties. Each of these components plays a critical role in defining the transaction and protecting the interests of both buyers and sellers.

When your landlord sells the property you're renting, your rights are primarily determined by your lease agreement and local tenant protection laws. Generally: (1) Your existing lease remains valid and transfers to the new owner who must honor its terms until expiration; (2) If you have a month-to-month agreement, the new owner may terminate it with proper notice as defined by local law; (3) You're entitled to proper notice before showings; (4) Your security deposit must be transferred to the new owner; (5) In some jurisdictions, you may have 'first right of refusal' to purchase the property; (6) The purchase agreement should specifically address existing tenancies, including whether the property will be delivered vacant or with tenants in place. Review your lease and local tenant laws, and consider consulting with a tenant rights attorney if you have concerns.

Real estate investors purchasing rental properties should consider including these specialized contingencies: (1) Tenant estoppel certificates to verify lease terms, rent amounts, and security deposits; (2) Review of all current lease agreements; (3) Verification of rental income and expenses; (4) Property management records review; (5) Inspection contingencies specific to rental properties (HVAC, plumbing systems, etc.); (6) Environmental assessments, especially for older properties; (7) Zoning and rental license verification; (8) Review of any pending tenant disputes or litigation; (9) Verification of security deposit transfers; and (10) Due diligence period for reviewing rent roll and occupancy history. These contingencies protect your investment by ensuring you have complete and accurate information about the property's condition and financial performance before completing the purchase.

When selling a rental property with existing tenants, consider these best practices: (1) Review lease agreements to understand your obligations regarding sale; (2) Provide written notice to tenants about your intent to sell, following requirements in your lease and local laws; (3) Establish showing protocols that respect tenant privacy and provide reasonable notice (typically 24-48 hours); (4) Decide whether to sell with tenants in place or vacant, understanding that occupied properties may appeal to investors while vacant properties might attract a broader range of buyers; (5) Clearly document security deposits and prepaid rent in the purchase agreement; (6) Prepare tenant estoppel certificates confirming lease terms and payment status; (7) Consider offering incentives for tenant cooperation during showings; and (8) Ensure the purchase agreement clearly addresses whether the buyer will honor existing leases or if you need to terminate tenancies before closing.

When selling rental properties, required disclosures typically include: (1) Standard property condition disclosures required for all real estate transactions in your jurisdiction; (2) Lead-based paint disclosures for properties built before 1978; (3) Known defects or material issues with the property; (4) History of pest infestations or treatments; (5) Flooding history or flood zone status; (6) Complete and accurate rent roll showing unit details, tenant names, rent amounts, and lease terms; (7) Security deposit amounts held for each tenant; (8) Pending or past litigation involving the property or tenants; (9) Notice of any code violations or outstanding compliance issues; (10) Disclosure of any tenant complaints or disputes; and (11) Property expense history including maintenance, repairs, and capital improvements. Failure to make required disclosures can result in legal liability, so consult with a real estate attorney familiar with landlord-tenant law in your area.

Financing for rental properties differs from primary residences in several key ways: (1) Higher down payment requirements, typically 20-25% versus 3-5% for primary residences; (2) Higher interest rates, usually 0.5-0.75 percentage points above primary residence rates; (3) Stricter credit score requirements, often 680+ for investment properties; (4) More stringent debt-to-income ratio requirements; (5) Potential consideration of existing rental income in qualification; (6) Reserve requirements of typically 6 months of mortgage payments per property; (7) Limitations on the number of financed properties with conventional lenders; (8) Different loan programs such as portfolio loans or commercial financing for larger properties; (9) More extensive property condition requirements; and (10) Potentially different closing cost structures. The purchase agreement should include appropriate financing contingencies that reflect these differences and provide adequate time for investment property loan approval.

When selling a rental property, consider these tax implications that might affect your purchase agreement: (1) Capital gains tax on the profit from the sale, which may be higher than for a primary residence; (2) Depreciation recapture tax on the depreciation deductions you've claimed; (3) Potential for a 1031 exchange to defer taxes by reinvesting in another investment property (requires specific language in the agreement); (4) State and local transfer taxes that must be allocated between parties; (5) Property tax prorations at closing; (6) Possible need for installment sale terms if you're financing part of the purchase for the buyer; (7) Tax implications of security deposit transfers; (8) Allocation of purchase price between land, buildings, and personal property which affects depreciation for the buyer; and (9) Timing considerations if you're trying to complete the sale in a specific tax year. Consult with a tax professional before finalizing your purchase agreement to ensure it's structured optimally for your tax situation.

When inspecting potential rental property investments, pay special attention to: (1) Structural integrity including foundation, roof, and load-bearing walls; (2) Major systems including HVAC, electrical, and plumbing with focus on multi-unit capacity; (3) Unit-specific amenities like appliances, fixtures, and finishes; (4) Common area conditions in multi-unit properties; (5) Deferred maintenance issues that could become expensive repairs; (6) Safety features including smoke detectors, carbon monoxide detectors, fire escapes, and security systems; (7) Potential code violations that would require immediate correction; (8) Signs of pest infestation or water damage; (9) Environmental concerns like mold, asbestos, or lead paint; (10) Accessibility compliance for ADA requirements if applicable; and (11) Utility efficiency and potential for cost-saving improvements. Your purchase agreement should include a thorough inspection contingency with sufficient time to bring in specialized inspectors for rental-specific concerns and the right to renegotiate or withdraw based on inspection findings.

When your rental property is sold, your security deposit should be handled as follows: (1) The seller (your current landlord) must transfer your security deposit to the new owner at closing; (2) This transfer should be documented in the purchase agreement and closing documents; (3) The seller should provide an accounting of all security deposits to the buyer; (4) In most jurisdictions, the new owner becomes legally responsible for your security deposit; (5) You should receive written notification about the transfer of your deposit, including the new owner's contact information; (6) The terms of your original lease regarding the security deposit remain in effect; (7) The new owner must follow the same rules for security deposit returns when your lease ends; (8) If your deposit isn't properly transferred, in many jurisdictions, both the former and new landlord may be held liable; (9) Keep documentation of your original security deposit payment and any correspondence about the transfer; and (10) If you have concerns about your deposit during a property sale, request written confirmation of the transfer from both the seller and buyer.

To structure a purchase agreement that supports a 1031 exchange: (1) Include language stating your intent to perform a 1031 exchange and requesting the other party's cooperation (though their cooperation isn't required for the exchange to be valid); (2) Add a clause allowing you to assign your rights in the purchase agreement to a qualified intermediary; (3) Specify that the exchange won't cause additional costs or liabilities for the other party; (4) Include contingencies related to identifying replacement properties within the IRS's 45-day identification period if you're the seller; (5) Consider longer escrow periods to accommodate finding replacement properties if selling; (6) Avoid language that would prevent working with a qualified intermediary; (7) Separate the values of real property (eligible for exchange) from personal property in the agreement; (8) Include provisions addressing earnest money handling through the qualified intermediary if you're selling; (9) Consider performance timelines that align with 1031 exchange deadlines; and (10) Consult with a tax professional and 1031 exchange specialist before finalizing the agreement to ensure it meets all IRS requirements for a valid exchange.