One of the quickest ways to make extra cash is to sell an asset you're not using. It could be a piece of exercise equipment sitting in the garage, a bike you have stored in the basement or even a car. A purchase agreement can help you make the sale of personal items, the exchange of business goods and services or an agreement involving large assets like a house more safe and secure.
Understanding how to write a purchase agreement will help you make transactions while preventing miscommunications, a damaged friendship or a trip to court.
Video of the Day
Consider Also: How to Fill Out a Residential Purchase Agreement
When to Use a Purchase Agreement
Throughout your life, you'll be involved in different types of agreements and contracts. Whenever you sell a good or service, if there's any chance that a misunderstanding will cause financial hardship, it's a good idea to write a quick purchase agreement. If you're selling a used tennis racquet for $20, don't bother. If you're selling old exercise equipment for $50, no need to worry about it – if the person wants to return it, no biggie.
If you run a small business, you might also sell things that require you to put in some time or money to complete the deal. A purchase agreement will protect your investment. You might be selling a widget, re-doing someone's deck or writing a series of blog posts for a business website. A purchase agreement, written in advance, can at least help you cover any actual costs you accrue completing the work if the person tries to back out later.
The term "purchase agreement" is most frequently associated with a real estate transaction. Those are complicated enough (even if you're just selling a lot you inherited) that you shouldn't try to write a real estate purchase agreement yourself. Always work with a real estate professional.
Consider Also: How to Write a Contract for Selling a Used Car
What’s in a Purchase Agreement?
A simple purchase agreement contains some or most of the following:
name of both parties (whether persons or businesses)
- item or service to be sold
- delivery date of good or service and payment date
- terms of the sale
- printed name (and/or title)
You will need to be very specific in the description of what you're selling as your price goes up. For example, if you're selling a used guitar, note that the guitar stand does or doesn't come with the sale or that the guitar comes with a case.
Purchase Agreement Terms and Disclosures
If you're selling a business service, make sure you include the number of items, the price of each, any kind of warranty or return policy, the manner in which they'll be delivered and anything else you want to put in the agreement to make sure everyone is on the same page. These are known as terms of service.
You should also call out any potential problems. For example, if you're selling a car to someone and they know the air conditioning is not working, you should include the fact that the car's air conditioner is not working in your purchase agreement. Calling out potential issues is known as including a disclosure agreement. In a real estate transaction, for example, sellers are required to disclose if the house has had mold or termites (even if repairs were made).
Consider Also: What Is an Intent to Sell Letter?
A Few Other Formalities
Make sure each person has a signed copy of the document. Whoever gets the original copy has more protection, so you might want to create two copies and have the parties sign each (you both get an original signature).
The more valuable the item, the more you might want to get the purchase agreement notarized. This means that you have a notary public stamp and sign the document saying she witnessed the transaction. Notary publics are available not only at law firms but also at quick copy or shipping shops (as an added service) and probably in your neighborhood.
It doesn't take much to become a notary public, and many nonprofessionals become one just to save themselves hassles when they need a document notarized. Use your social media channels to ask if any of your neighbors, friends or coworkers are notary publics and if they can notarize a document for you.