Who draws up the contract in a For Sale By Owner transaction depends on whether you live in a state like New York where attorneys are mandated by state law, or whether you live in a state like Florida where lawyers are not required.
If you live in New York, then as a seller you’re required to have your own attorney, so he or she will be responsible for drawing up the purchase contract and sending it to the buyer’s attorney after you accept an offer.
If you live in Florida where Realtors usually guide buyers and sellers through a standard, fill-in-the-blank, Realtor association contract, then as a FSBO seller without a Realtor you’ll generally need to hire an attorney if you want someone to advise you on the legalese.
Who usually writes the purchase and sale agreement?
Purchase agreements in real estate transactions are almost always based off of pre-written, standard contracts issued by the local or state Realtor or BAR associations.
As a result, you won’t have to worry about hiring a lawyer to re-invent the wheel and come up with a completely custom purchase agreement just for you. With that said, the degree of customization of these standard purchase contracts can vary greatly depending on where you live.
As we’ll describe further below, in some states the purchase contract is nothing more than a fill-in-the-blank form that is never marked up.
In other states, it’s customary to mark up the standard purchase contract and also to include a completely custom rider (i.e. addendum) to the contract.
Who writes the contract when selling a house?
If you’re selling a house FSBO, then you’ll most likely need to hire a lawyer to help you review and/or negotiate the purchase contract. If your property is in a state like New York where lawyers are mandated, then you’ll need a lawyer anyway.
And if your home is in a state like Florida where lawyers are not mandated, then you’ll probably want a lawyer anyway to help you review the standard Realtor purchase contract.
Who writes the contract when buying a house?
As the buyer, you almost never write the contract, or at least not the first draft. In a state like New York where lawyers are mandated and contracts are custom, the seller’s attorney always customarily sends out the draft contract to the buyer’s attorney for review and negotiation.
And in a state like Florida where fill-in-the-blank style standard Realtor purchase contracts are utilized, you or your buyer’s agent might submit a signed contract when making an offer, but neither you nor your buyer’s agent is expected to come up with any new language.
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So who writes the contract when buying a house? Well, it depends on whether your state requires the buyer and seller to have their own attorney, or whether the Realtors can simply assist you in filling out a standard Realtor association purchase contract.
If you’re in one of the rare states like New York that require attorneys on both sides of the transaction, then typically the seller’s attorney will have a draft contract sent to the buyer’s attorney for review shortly after the buyer’s offer has been “accepted.”
Remember that in New York, accepted offers are non-binding and simply means the buyer and buyer’s attorney can begin due diligence.
Only after due diligence is complete, and the contract has been negotiated to satisfaction and signed first by the buyer, then counter-signed by the seller, is a deal binding in New York.
So in states like New Yor where attorneys are mandated by state law for real estate transactions, then the seller’s attorney typically writes up a purchase agreement.
The seller’s attorney will send a minimally modified standard BAR association purchase contract, along with a custom seller’s contract rider to the buyer’s attorney for review.
Now the buyer’s attorney will undoubtedly have comments and will want to negotiate the language, so the buyer’s attorney will send back a marked up version along with a buyer’s purchase rider to the contract of sale.
Pro Tip: Perhaps the more salient question would be who can write a purchase agreement? Well, in New York real estate agents are prohibited from advising on legal matters, so only your lawyer should be drafting and negotiating the contract on your behalf.
In most states, real estate offers are submitted via a buyer signed copy of the standard Realtor contract, which is often a fill-in-the-blank form prepared by the state’s Realtor and/or BAR association.
In practice, either the buyer’s Realtor or the listing Realtor, if the buyer is unrepresented, will assist the buyer in filling out the standard Realtor purchase contract during the offer submission stage.
So either the Realtor can help the buyer fill in the form, or the buyer can fill it in him or herself before submitting the signed contract as a formal offer.
Keep in mind that even though most states, like Florida, won’t require the buyer and the seller to each have their own attorneys, an attorney will usually still be present for closing. That’s because the closing agent is often a Florida closing attorney who often wears multiple hats, and is also the title company’s authorized agent, escrow agent etc.
Pro Tip: Keep in mind the Florida closing attorney will there on closing day to advise both the buyer & seller what documents such as the Florida warranty deed they need to sign, and to make sure everything is in order and the relevant documents are sent to be publicly recorded.
