When it comes to buying or selling a home, one of the most important documents involved is the residential purchase agreement. This is a legally binding contract that outlines the terms of the sale, including the price, closing date, and any contingencies that must be met before the sale can be finalized.
In Minnesota, the residential purchase agreement for 2020 has undergone some changes that buyers and sellers need to be aware of. Here are some of the key updates:
1. Additional contingencies
The 2020 purchase agreement now includes two new contingencies that buyers can add to their offer. These are an inspection contingency and an appraisal contingency. An inspection contingency gives the buyer the right to have a professional home inspection done before closing to make sure there are no significant issues with the property. An appraisal contingency ensures that the property is appraised at or above the sale price, which protects the buyer from overpaying.
2. Earnest money
The earnest money deposit is a sum of money that the buyer puts down as a show of good faith when they make an offer on a property. In Minnesota, the 2020 purchase agreement now requires that the earnest money deposit be deposited into an escrow account within three days of the offer being accepted. This ensures that the funds are secure and protected until the sale is finalized.
3. Closing costs
Closing costs are the fees and charges associated with the purchase of a home, such as title fees, appraisal fees, and attorney fees. In Minnesota, the 2020 purchase agreement now requires that the seller pay for the owner’s title insurance policy, which protects the buyer from any title issues that may arise after the sale.
4. Electronic signatures
With more and more transactions being conducted online, the 2020 purchase agreement in Minnesota now allows for electronic signatures to be used. This means that buyers and sellers can sign the contract digitally, making the process faster and more convenient.
It’s important to note that the residential purchase agreement is a legally binding contract, and any changes or modifications should be made with the guidance of a real estate attorney or licensed agent. By understanding the updates to the 2020 purchase agreement, buyers and sellers in Minnesota can navigate the home buying process with confidence and ease.