Monday, February 8th, 2016

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Real Estate Purchase Contract…Undressed (Free Download, Plus Video)

You remember the free option agreement form and video I gave out recently? Here’s another one for you...

Today it’s my “Quick N’ Dirty” buying contract — specifically the one I use for wholesale/quick flip deals…and even more specifically when going “belly to belly” with an individual seller (i.e. non-listed property)

I think you’ll be glad to see it’s about as simple, plain-English and non-threatening as you can get.

Granted, it may not be the most comprehensive real estate contract around — but for that you can go to your local board of Realtors.  And from time to time you probably will.

But I like this one a lot because it’s notably lacking in bloat, but I find it gets the job done real nice for me.

1) Start by downloading a copy of the contract for yourself…

To do this, right-click here and select “Save Target As…” from your Windows menu.

3 quick things:

1) Here’s a quick screen-capture video I made demonstrating how to download the doc in Internet Explorer on a Windows computer.

2) If you’re a Mac user, then instead do whatever it is you Mac folks do to download stuff.

3) The form is in MS Word (.doc) format.  If you don’t already have MS Word on your computer, then Open Office should do the trick for you (and it’s open-source freeware).

Oh, and I’m giving you a personal license to use this document in your own real estate business.  But please don’t sell it or give it away yourself.  If you know of someone else who would benefit from this, please send them a link to this page so they can come here and get it themselves.

Why?  Because I’d like to give them the chance to become an REI Tips subscriber…just like you.  :-)

2) Then watch the “how to” videos…

Here’s my short, 2-part video walking through this form, how to fill it out and how I use it specifically.

I hope you find it useful, and I’d really appreciate hearing any comments you may have if you could please share them below.

Thanks.

Real Estate Purchase Agreement, Undressed – Part 1

Real Estate Purchase Agreement, Undressed – Part 2

Technorati: Real Estate Investing, Free Real Estate Purchase Contract

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About 

JP Moses is a roughly-hewn man-child who first got into REI after reading Rich Dad, Poor Dad back in Y2K and went full time in 2002. He's tinkered in everything from landlording to short sales to rehabs to Realtoring to REOs to notes to owner financing, blah, blah, blah...Till he finally stuck his flag deep into wholesaling and has since flipped somewhere north of a couple hundred deals.

JP's not a “guru” but also doesn't think it's a bad word. Among his core values are authenticity, creativity, big honkin' value, general fun-ness and being unshaven. He's super proud to be chief blogger guy at REItips.com and host of the free REIology podcast. He also thoroughly enjoys sharing his 53 best real estate investing forms with anyone who wants them. You should totally check that out. :-)

  • Peggy

    Wow, is that ever a simple contract!!! Thanks…

  • Peggy

    Wow, is that ever a simple contract!!! Thanks…

  • Lloyd Rupp

    I have an error on page message!

    HELP!

  • Lloyd Rupp

    I have an error on page message!

    HELP!

  • http://REItips.com/ jp

    Lloyd, it seems to be working great for me. Have you tried rebooting your browser? Maybe it was just a momentary hiccup…try again???

    …jp

  • http://REItips.com jp

    Lloyd, it seems to be working great for me. Have you tried rebooting your browser? Maybe it was just a momentary hiccup…try again???

    …jp

  • norm

    The purchase agreement form will not download. When you openit goes back to thepage of instructions on how to download. The video works great.

  • http://www.reitips.com/ JP Moses

    @norm – Norm, here I made a quick video demonstrating how to download it: http://screencast.com/t/2cecJXQZQk

    Hope that helps,

    …jp

  • norm

    The purchase agreement form will not download. When you openit goes back to thepage of instructions on how to download. The video works great.

  • http://www.reitips.com JP Moses

    @norm – Norm, here I made a quick video demonstrating how to download it: http://screencast.com/t/2cecJXQZQk

    Hope that helps,

    …jp

  • Jeremy

    If you find yourself not able to assign this contract or close on it yourself. What is typically the way you go about “exiting” this contract?

  • http://www.reitips.com/ JP Moses

    @Jeremy – Jeremy, it’s got an “out” clause (the final inspection) but I really try not to use “weasel clauses”. They have that name for a reason. :-)

    If I’m not sure if I can flip it, I’ll lock it up with an Option Agreement instead. Or I’ll let them know it’s contingent upon my partner and/or contractor doing a full inspection withing 7 days, then give myself that 7 days to lock in a buyer. If I don’t, then I tell them my partner didn’t approve of the deal…that’s a way to give yourself some wiggle room without stringing them along unfairly.

    Make sense?

  • Jeremy

    If you find yourself not able to assign this contract or close on it yourself. What is typically the way you go about “exiting” this contract?

  • http://www.reitips.com JP Moses

    @Jeremy – Jeremy, it’s got an “out” clause (the final inspection) but I really try not to use “weasel clauses”. They have that name for a reason. :-)

    If I’m not sure if I can flip it, I’ll lock it up with an Option Agreement instead. Or I’ll let them know it’s contingent upon my partner and/or contractor doing a full inspection withing 7 days, then give myself that 7 days to lock in a buyer. If I don’t, then I tell them my partner didn’t approve of the deal…that’s a way to give yourself some wiggle room without stringing them along unfairly.

    Make sense?

  • Jeremy

    Yes it does make more sense. Thank You!

    It seems as when your starting out, your more likely to be unsure if you can flip the contract. Therefore you should use a option contract. The more deals you do, the more comfortable you’ll be in knowing how quickly/ likely you can flip a contact. Therefore you can start to use the Purchase to Sale contract more often.

  • Jeremy

    Yes it does make more sense. Thank You!

    It seems as when your starting out, your more likely to be unsure if you can flip the contract. Therefore you should use a option contract. The more deals you do, the more comfortable you’ll be in knowing how quickly/ likely you can flip a contact. Therefore you can start to use the Purchase to Sale contract more often.

  • http://www.deangraziosiinc.com/ real estate millionaire

    You have really simplified the contract process down to easier to read layman’s terms. Very helpful to those who are looking to to not have a “strings-attached” approach to selling their house or real estate. Good work here!

  • http://www.deangraziosiinc.com real estate millionaire

    You have really simplified the contract process down to easier to read layman’s terms. Very helpful to those who are looking to to not have a “strings-attached” approach to selling their house or real estate. Good work here!

  • Grace Stroup

    JP,

    I have a dumb Qtn. is the Contract/Purchase Agreement. is that an Offer Contract also?

    Thank you,

    Grace Stroup

  • http://www.reitips.com/ JP Moses

    @Grace Stroup – Grace, if I understand what you’re asking, then yes. The Purchase & Sale Agreement I put out here is the contract I use to make offers on when I’m buying. (i.e. my “offer contract”).

    …jp

  • Grace Stroup

    JP,

    I have a dumb Qtn. is the Contract/Purchase Agreement. is that an Offer Contract also?

    Thank you,

    Grace Stroup

  • http://www.reitips.com JP Moses

    @Grace Stroup – Grace, if I understand what you’re asking, then yes. The Purchase & Sale Agreement I put out here is the contract I use to make offers on when I’m buying. (i.e. my “offer contract”).

    …jp

  • http://www.11daysale.net/ Taylor

    Thanks JP!

    Your content never fails to deliver! We had another closing last week, netted $15k. A direct result of the Preston Ely call that you did in June 07. I can’t thank you enough.

    Have a healthy & happy holiday season.

    Keep ’em coming!
    Scott Taylor
    Arroyo Grande, CA

  • http://www.reitips.com/ JP Moses

    @Taylor – That’s awesome, Scott! Knock ’em dead, bro! :-)

    …jp

  • http://www.11daysale.net Taylor

    Thanks JP!

    Your content never fails to deliver! We had another closing last week, netted $15k. A direct result of the Preston Ely call that you did in June 07. I can’t thank you enough.

    Have a healthy & happy holiday season.

    Keep ’em coming!
    Scott Taylor
    Arroyo Grande, CA

  • http://www.reitips.com JP Moses

    @Taylor – That’s awesome, Scott! Knock ’em dead, bro! :-)

    …jp

  • Ray

    Hi,

    Whats the difference between the RE Purchase Contract and the RE Assignment Contract. They both seem to do the same thing.

    From JP: Ray, there’s a big difference actually.

    The RE Purchase Contract is the contract you use to buy the house with.
    The RE Assignment is the document you’d use to assign your purchase contract to another party – to have them step into your shoes in the deal.

    You may want to watch both videos back to back. That would probably clear it up for you. :-)

    My best,

    …jp

  • Ray

    Hi,

    Whats the difference between the RE Purchase Contract and the RE Assignment Contract. They both seem to do the same thing.

    From JP: Ray, there’s a big difference actually.

    • The RE Purchase Contract is the contract you use to buy the house with.
    • The RE Assignment is the document you’d use to assign your purchase contract to another party – to have them step into your shoes in the deal.

    You may want to watch both videos back to back. That would probably clear it up for you. :-)

    My best,

    …jp

  • Ray

    ok, so both work hand in hand….got it Thanks

  • Ray

    ok, so both work hand in hand….got it Thanks

  • http://www.HuntsvilleHouseBuyers.com/ Ken

    Hey JP,

    This may be asking too much, but could you provide a copy of a real estate purchase offer you use?

    Thanks,

    Ken

  • http://www.HuntsvilleHouseBuyers.com Ken

    Hey JP,

    This may be asking too much, but could you provide a copy of a real estate purchase offer you use?

    Thanks,

    Ken

  • Ken

    Hey JP,

    I am confused about the offer process. Most wholesalers seem to gloss over this area.

    The reason I asked for a copy of your “Purchase Offer” in my earlier question is some Guru’s advise sending an Offer to sellers first. If they accept then you write up a contract.

    If you don’t use a Purchase Offer how do you make your offers? Do you verbally haggle over the contract price with the seller at their house or on the phone?

    I know you are the one to ask. Your knowledge is greatly appreciated!

    Thanks,

    Ken

    Hey, Ken – thanks for the comment/question.

    Admittedly I didn’t understand exactly what you were asking for at first. To me a “purchase offer” is just another way of saying “purchase contract” or “offer”, etc.

    Sounds like you’re talking about a “Letter of Intent” or “Offer Letter”. And yes, I do have one – though admittedly I haven’t used it much. Tend to prefer just using a contract from the start. But letters of intent are much more prevalent in the commercial arena.

    You asked, “If you don’t use a Purchase Offer how do you make your offers? Do you verbally haggle over the contract price with the seller at their house or on the phone?”

    I usually begin the negotiation process over the phone, but rarely finish it there. Most of the time — with individual sellers — I’ll deal with them in person, negotiate terms, then write it up on a contract between us. When dealing with REOs, you just have to submit your offer (usually on a state approved or bank approved contract) and fish for a counter.

    Don’t let yourself be intimidated by the offer on a contract. It’s not nearly as big a deal as it FEELS like it is at first. :-)

    That help any?

    …jp

  • Ken

    Hey JP,

    I am confused about the offer process. Most wholesalers seem to gloss over this area.

    The reason I asked for a copy of your “Purchase Offer” in my earlier question is some Guru’s advise sending an Offer to sellers first. If they accept then you write up a contract.

    If you don’t use a Purchase Offer how do you make your offers? Do you verbally haggle over the contract price with the seller at their house or on the phone?

    I know you are the one to ask. Your knowledge is greatly appreciated!

    Thanks,

    Ken

    Hey, Ken – thanks for the comment/question.

    Admittedly I didn’t understand exactly what you were asking for at first. To me a “purchase offer” is just another way of saying “purchase contract” or “offer”, etc.

    Sounds like you’re talking about a “Letter of Intent” or “Offer Letter”. And yes, I do have one – though admittedly I haven’t used it much. Tend to prefer just using a contract from the start. But letters of intent are much more prevalent in the commercial arena.

    You asked, “If you don’t use a Purchase Offer how do you make your offers? Do you verbally haggle over the contract price with the seller at their house or on the phone?”

    I usually begin the negotiation process over the phone, but rarely finish it there. Most of the time — with individual sellers — I’ll deal with them in person, negotiate terms, then write it up on a contract between us. When dealing with REOs, you just have to submit your offer (usually on a state approved or bank approved contract) and fish for a counter.

    Don’t let yourself be intimidated by the offer on a contract. It’s not nearly as big a deal as it FEELS like it is at first. :-)

    That help any?

    …jp

  • Ken

    Yes. Thank you JP. I have not made an offer yet and I am trying to get my ducks in a row before I take the first step. As always I appreciate your advice!

    Ken

  • Ken

    Yes. Thank you JP. I have not made an offer yet and I am trying to get my ducks in a row before I take the first step. As always I appreciate your advice!

    Ken

  • Demetri

    Can this contract be used if the Seller has a Realtor representing them? I would assume the realtor is going to comeback with something different.

  • Demetri

    Can this contract be used if the Seller has a Realtor representing them? I would assume the realtor is going to comeback with something different.

  • http://buyinghouston.net/ sonnyu

    jp, thanks for the sample contract. i guess i missed the deadline on the video on how to fill it out.
    you always have the most informative real estate videos on the net. i’ve learned more from your short videos than i’ve learned from hours of videos by some of the big gurus.
    thanks!

  • http://buyinghouston.net sonnyu

    jp, thanks for the sample contract. i guess i missed the deadline on the video on how to fill it out.
    you always have the most informative real estate videos on the net. i’ve learned more from your short videos than i’ve learned from hours of videos by some of the big gurus.
    thanks!

  • Denise Thomas

    I am a newbie who lives in Pennsylvania. I have read about options and I still feel unsure of what to do. What is the first thing that I should do? What happens when I find a buyer? How am I paid? Can you please give me some direction on this?

  • Denise Thomas

    I am a newbie who lives in Pennsylvania. I have read about options and I still feel unsure of what to do. What is the first thing that I should do? What happens when I find a buyer? How am I paid? Can you please give me some direction on this?

  • STEPHUS

    HELLO JP I HAVE A QUESTION ABOUT THE DESCRIPTION WRITTEN AS FOLLOWS,ON THE AGREEMENT FOR SALE CONTRACT.WHAT DOES CD MEAN?

    Hey, Stephus, can you clarify your question please? I’m not understanding…

    Thanks,

    …jp

  • BooDog

    He said ‘see deed’.  Not cd.

  • STEPHUS

    HELLO JP I HAVE A QUESTION ABOUT THE DESCRIPTION WRITTEN AS FOLLOWS,ON THE AGREEMENT FOR SALE CONTRACT.WHAT DOES CD MEAN?

    Hey, Stephus, can you clarify your question please? I’m not understanding…

    Thanks,

    …jp

  • http://www.SiliconValleyRealEstateInvestor.com/ Eric

    I understand why a seller would need consideration to sell an option, but in a P&S contract, why is there still consideration needed?
    .-= Eric´s last blog ..3 Secrets to Reading Housing data for the Real Estate Investor, Part 1: Understanding Seasonally-Adjusted Data =-.

    It just has to do with contract law. Legal consideration is required for a contract to be considered enforceable. Be it an option, purchase contract or whatever. That’s what they taught me in my contract law class back in the day.

    …jp

    PS…Interestingly “love and affection” can be considered legal consideration in a contract. Learned that one too. Not sure how you’d prove it was REAL…but it’s in the law. Yeah, weird!

  • http://www.SiliconValleyRealEstateInvestor.com Eric

    I understand why a seller would need consideration to sell an option, but in a P&S contract, why is there still consideration needed?
    .-= Eric´s last blog ..3 Secrets to Reading Housing data for the Real Estate Investor, Part 1: Understanding Seasonally-Adjusted Data =-.

    It just has to do with contract law. Legal consideration is required for a contract to be considered enforceable. Be it an option, purchase contract or whatever. That’s what they taught me in my contract law class back in the day.

    …jp

    PS…Interestingly “love and affection” can be considered legal consideration in a contract. Learned that one too. Not sure how you’d prove it was REAL…but it’s in the law. Yeah, weird!

  • Sharon

    JP, I have a very motivated out-of-state seller that has forwarded a 2006 appraisal valued at $1.6 and now offering for $1.1. #1 how do I determine today’s value? #2 Which contract would you suggest I use to flip?

    Hi, Sharon. First of all, the 2006 appraisal is worth toilet paper. We all know today’s market is a far cry from then. The only thing that matters is current comparables. Ideally within the last 3 months in most cases these days. And the more “stupid simple” they are, the better for you. I suggest trying for at least 3 “stupid simple” comps (borrowing that term from my buddy Bob :-) )

    I know it may be hard to find comps for higher priced homes. And that’s the problem with them in general. And that’s part of what makes them riskier in today’s market.

    I’d suggest doing your best possible due diligence based on as many comps as you can find. Then I’d tie it up with a “flexible option” if possible, rather than a contract. Explain that you won’t close unless you find a buyer to flip it to, and it appraises for at least $X.

    You can get an option agreement from my packet of 53 forms, or just use one from your local board of Realtors.

    My best,

    …jp

  • Sharon

    JP, I have a very motivated out-of-state seller that has forwarded a 2006 appraisal valued at $1.6 and now offering for $1.1. #1 how do I determine today’s value? #2 Which contract would you suggest I use to flip?

    Hi, Sharon. First of all, the 2006 appraisal is worth toilet paper. We all know today’s market is a far cry from then. The only thing that matters is current comparables. Ideally within the last 3 months in most cases these days. And the more “stupid simple” they are, the better for you. I suggest trying for at least 3 “stupid simple” comps (borrowing that term from my buddy Bob :-) )

    I know it may be hard to find comps for higher priced homes. And that’s the problem with them in general. And that’s part of what makes them riskier in today’s market.

    I’d suggest doing your best possible due diligence based on as many comps as you can find. Then I’d tie it up with a “flexible option” if possible, rather than a contract. Explain that you won’t close unless you find a buyer to flip it to, and it appraises for at least $X.

    You can get an option agreement from my packet of 53 forms, or just use one from your local board of Realtors.

    My best,

    …jp

  • Bill

    JP…Thankyou so much for the forms! you have hammered out a giant stumbling block that holds many people back from making wholesale deals happen!-namely: contractual confusion and fear of litigation and accountability…..your service is wonderful and I will refer this site to my colleagues

    Be well
    Bill Berry

  • Bill

    JP…Thankyou so much for the forms! you have hammered out a giant stumbling block that holds many people back from making wholesale deals happen!-namely: contractual confusion and fear of litigation and accountability…..your service is wonderful and I will refer this site to my colleagues

    Be well
    Bill Berry

  • Chantelle

    Thanks for the free contract! Things like this are treated as gold with other gurus and they rarely give out their gold. Quick question: Do you have the Preston Ely call available to your readers? You have to be a member of Preston's club to hear any archives. Just wondering.

    Thanks again!

  • Darlene

    Thank you. Your site has been very helpful!

  • ShortSaleSDude

    JP, I owe you guys big time for these vids! Ok, consideration of $10, 20, 50, or $100 makes the contract enforceable, right? Now what is the purpose of the earnest money if I just put consideration down to enforce the contract? What is earnest money? How much earnest money is needed?

  • http://REItips.com/ jp moses

    It’s a little hard to explain…but “legal consideration” isn’t necessarily the same thing as earnest money. I honestly don’t understand it fully myself…I did at one point, back in the day when I took my Realtor licensure classes. But I know Earnest Money can count as legal consideration…but other things can also…even love and affection in TN (as I mentioned in the video – crazy, I know).

    Typically when a real estate contract mentions “for $10 and other good consideration” you don’t actually give them the $10. No one I’ve ever known has done that.

    Not a lot of clarity there…but then again, I’m still lacking a little coffee this morning. :-)

    …jp

  • http://www.usgoldustinternational.com Valerie Robinson

    Jp..Thanks you for the REI forms and the walk through steps. Valerie Robinson

  • Anonymous

    HI JP,

    I see that there are two fields for seller signature, does the seller have to sign twice or is the other sig field for us when we flip the house?

    Also, when does the purchase contract come in? Is it after you have a confirmed buyer? I just got a little confused on this since we tie up the property with an option, right?

    Thanks,

    Mon.
    ***sorry, can’t edit handle on my disquss account***

  • kim

    This is the  best site on RE that I found…you are awesome! Giving out free forms for the newbies and anyone who needs it. THANKS!! Gotta tell you, I’ve been searching for forms for a while and unable to find one until I found your site.