The state of Tennessee has recently updated its purchase and sale agreement form, which is used in real estate transactions across the state. The new form, which went into effect on January 1, 2018, includes several changes that buyers and sellers should be aware of.
One of the most significant changes to the purchase and sale agreement is the addition of a paragraph requiring the parties to disclose any known defects or conditions of the property. This disclosure must be made in writing and signed by both parties. This change is designed to protect buyers from purchasing a property with hidden defects or conditions.
Another important change is the addition of a paragraph allowing for a “due diligence period.” This period, which is typically 10-15 days, allows the buyer to conduct inspections and investigations of the property before the sale is final. During this period, the buyer can terminate the agreement for any reason and receive a full refund of their earnest money deposit.
The new form also includes updated language regarding financing and contingencies. For example, the financing section now includes a provision requiring the lender to provide a copy of the loan commitment to the seller. The contingency section has been expanded to include additional contingencies, such as the buyer`s ability to obtain insurance and the seller`s ability to convey clear title.
Another change that buyers should be aware of is the addition of a paragraph regarding the handling of prorated expenses. This includes items such as property taxes, homeowners association dues, and rent payments. The new form requires these expenses to be prorated as of the closing date, rather than the end of the month.
Finally, the new purchase and sale agreement includes several minor updates to the language and formatting of the form. These changes are designed to make the form more user-friendly and easier to understand.
Overall, the new Tennessee purchase and sale agreement form includes several important changes that buyers and sellers should be aware of. If you are involved in a real estate transaction in Tennessee, it is important to work with a knowledgeable real estate agent or attorney to ensure that you fully understand the terms of the agreement.