In Rhode Island most buy and sell agreements (purchase and sales agreements) for single-family homes are on a form prepared by the Rhode Island Association of Realtors. The Purchase and Sales Agreement is a very important legal document that typically sets forth the sales price, time, date and place of the residential real estate closing, contingencies based on financing, as well as many other provisions.
You may attempt to negotiate modifications to this agreement and are not obligated to sign the standard form. Prior to signing the Purchase and Sales Agreement, the buyer should contact a Rhode Island lawyer / attorney who specializes in real estate law, residential real estate closings and title law.
This agreement was drafted with the intent to be fair to both buyers and sellers of residential real estate; however, the buyer should not sign this agreement without paying careful attention to all of the provisions including the following provisions:
1. The agreement provides for a certain number of days within which buyer must apply for his/her mortgage. Pursuant to the terms of the standard Rhode Island Purchase and Sales Agreement, if the buyer fails to apply for the mortgage, his deposit will be forfeited. Please make certain that you allow enough days for this application to be made.
2. The agreement provides that if the buyer applies for a mortgage greater than the amount set forth in the Purchase and Sales Agreement, buyer will have no right to obtain a return of his deposit if his mortgage application is denied. Buyer should be certain that the amount filled in for his proposed mortgage is in fact the highest amount that he intends to apply for.
3. The agreement provides that the buyer must accept the property with any easements or restrictions of record that impact the property. The buyer should read the Rhode Island Real Estate Sales Disclosure Form prior to signing the Purchase and Sales Agreement. Rhode Island Law requires that the seller of residential real estate in RI notify the buyer of any restrictions or easements. Buyer should check the disclosure form and if the seller indicates that there are restrictions or easements, buyer should read them prior to signing the Purchase and Sales Agreement. If the buyer does not understand the legal implications of the restriction or easement, then they should contact their real estate attorney.
4. Buyer’s right to a return of their deposit in the event they are not satisfied with house inspections, such as physical/mechanical, pest infestation and septic system, depends on the inspector finding a substantial / materially deficient condition which has not been disclosed to the buyer prior to the execution of the Purchase and Sales Agreement. This means that the buyer should carefully read the Real Estate Disclosure supplied by the seller prior to signing the Purchase and Sales Agreement to make certain that seller has not disclosed existing deficient conditions on the property in this form. If deficient conditions have been disclosed, the Purchase and Sales Agreement should be amended to indicate that buyer may terminate the agreement based upon these deficient conditions