Covid 19 Purchase and Sale Agreement

COVID-19 Purchase and Sale Agreement: Protecting Your Deal in the Pandemic

The COVID-19 pandemic has affected every aspect of our lives, and the real estate industry is no exception. With social distancing and stay-at-home orders in place, traditional home buying and selling processes have been disrupted. As a result, there`s been a need for new COVID-19 purchase and sale agreement clauses to protect both buyers and sellers.

What Is a COVID-19 Purchase and Sale Agreement?

A COVID-19 purchase and sale agreement is an addendum to the standard purchase and sale agreement. It includes additional clauses specifically addressing the impact of the pandemic on the purchase and sale of property. These clauses aim to provide both parties with more flexibility, protection, and clarity in case of pandemic-related issues.

Here are the key provisions that COVID-19 purchase and sale agreements may include:

1. Force Majeure Clause: This clause acknowledges that the COVID-19 pandemic is an unforeseeable event that is beyond the control of either party. It allows for the postponement of the closing date or the termination of the contract if either party is unable to perform their obligations due to COVID-19-related reasons, such as government-imposed shutdowns or travel restrictions.

2. Inspection and Walk-Through Clause: Many home buyers are unable to visit properties in person due to COVID-19 concerns. This clause allows for virtual inspections and walk-throughs to be conducted, or to delay the inspection until it is safe to do so. It also allows the buyer to cancel the contract or renegotiate the price if the virtual inspection reveals any unexpected issues.

3. Contingency Clause: This clause protects the buyer`s earnest money deposit if the buyer is unable to obtain financing due to the economic impact of the pandemic.

4. Closing Date Extension Clause: This clause allows for the extension of the closing date in case of delays caused by COVID-19-related reasons, such as a backlog of mortgage or title work.

Why Do You Need a COVID-19 Purchase and Sale Agreement?

In the current uncertain and volatile market, a COVID-19 purchase and sale agreement can protect both buyers and sellers. It ensures that both parties are aware of the risks and uncertainties of the pandemic and are prepared for any contingencies that may arise.

If you`re a buyer, a COVID-19 purchase and sale agreement will provide you with flexibility and protection if you`re unable to visit the property or close on the purchase due to the pandemic. It will also protect your earnest money deposit in case of financing issues.

If you`re a seller, a COVID-19 purchase and sale agreement will protect you in case the buyer is unable to close the deal due to pandemic-related reasons. It will also allow you to postpone or cancel the deal if the pandemic has impacted your ability to move or find another property.

Conclusion

In summary, a COVID-19 purchase and sale agreement is a crucial tool for buyers and sellers during this unprecedented time. It provides additional clauses that protect both parties in case of pandemic-related issues that may affect the purchase and sale of a property. Be sure to consult with a real estate lawyer or a licensed real estate agent when drafting or reviewing your COVID-19 purchase and sale agreement.

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