Distinguish between a Sale and an Agreement of Sale

August 1, 2022 Facebook Twitter LinkedIn Google+ Uncategorized

When it comes to real estate transactions, the terms “sale” and “agreement of sale” are often used interchangeably, despite the fact that they have distinct meanings. Understanding the difference between these terms is crucial, especially if you are buying or selling a property.

A sale refers to the actual transfer of ownership of a property from the seller to the buyer. In a sale, the buyer pays the total purchase price of the property, and the seller transfers all the legal rights to the property to the buyer. Once the sale is complete, the buyer takes possession of the property and assumes all the responsibilities and benefits of ownership.

On the other hand, an agreement of sale is a contract between the buyer and seller that outlines the details of the transaction. In an agreement of sale, the buyer agrees to purchase the property at a certain price under specific terms and conditions, while the seller agrees to sell the property to the buyer under these same terms and conditions. This agreement typically includes details such as the closing date, payment terms, and any contingencies that must be met for the sale to go through.

While an agreement of sale is a legally binding contract, it does not transfer ownership of the property. It merely establishes the terms and conditions that both parties agree to follow in order to complete the sale.

It is important to note that different states have different legal requirements for the sale of real estate. Some states require an agreement of sale to be signed before the sale is complete, while others require the sale to be completed before an agreement of sale can be signed.

In some cases, the terms “sale” and “agreement of sale” may be used interchangeably, and the legal meaning will depend on the specific context of the transaction. However, in order to protect your rights and ensure a smooth transaction, it is important to understand the difference between these terms and to work with a qualified real estate professional who can guide you through the process.