**An Overview of Ohio Purchase Agreement**

**Ohio Purchase Agreements Explained**

Understanding the state of Ohio purchase agreement begins with what a purchase agreement is and how it functions as part of the real estate transaction process. A purchase agreement is essentially a legally binding sales contract between a buyer and seller on a particular piece of real estate, usually residential. The purchase agreement may contain contingencies and other stipulations.
In addition to taking over the responsibilities of the seller , any purchase agreement signed by the parties prior to the closing of the sale is legally binding. There may be exceptions based on contingencies such as the home inspection. Once signed, however, the purchase agreement supersedes all previous discussions and negotiations between the buyer and seller.
The Ohio purchase agreement makes it easier for the buyer by detailing the full obligation of the seller and by listing the lender, date of closing, purchase price and all other terms agreed upon by both buyer and seller.

**Elements of an Ohio Purchase Agreement**

A purchase agreement is basically a binding contract between the buyer and seller for the sale of real property. It is important to keep in mind that these are legally binding contracts and both parties should be represented by professional legal counsel to ensure that their respective interests are protected. The State of Ohio specific purchase agreements are designed to meet all applicable Ohio laws, rules and regulations. Some of the key components of an Ohio purchase agreement include: Contract terms – These should be clearly, concisely and completely presented in the purchase agreement. In Ohio, these contracts are set forth by the local board of realtors. It is standard that the buyer must complete and initial a full, detailed Ohio realtors purchase agreement. While many purchase agreements provide boilerplate language, Ohio law has many provisions that must be included. If you attempt to create your own agreement on your computer, you may miss some very important contract provisions required by law, and you may miss important provisions that benefit you as a buyer. Contingencies – Again, in Ohio, there are a multitude of contingencies that are required to be set forth and satisfied through the purchase agreement. It is not uncommon to have a requirement that you approve and waive any conditional contingencies within the purchase agreement, even though there are other documents and/or approvals that you are waiting on to be furnished to you prior to completing the transaction. In most cases, it is advised that you verify all loan approvals, financing availability, mortgages and all other related details prior to waiving any contingency required under the Ohio purchase agreement. Financial details – In most cases, there will be a financial portion of the transaction that offers contingencies in the event that any deposits or down payments are lost or defaulted on, incomplete, insufficient or have a timeline beyond your control, i.e. a closing contingent upon receiving funds from another transaction that you are closing on. Lender contingencies and earnest money deposits must also be addressed, as well as any outstanding liens or taxes with regards to the real estate property to be purchased. Legal obligations – It is imperative that all legal obligations are addressed through the purchase agreement or another agreement between both parties. Any legal obligations not expressly stating penalties and defaults may not be enforceable in the event that an issue arises. For example, if a deposit is required by the buyer and is not made within 48 hours, the agreement should specify whether the buyer has the right to default on the agreement for lack of compliance, or whether the seller has the right to enforce the penalty of flat monetary damages, forfeiture of the entire deposit and/or the right to cancel the entire agreement.

**Ohio Purchase Agreement Legal Requirements**

The State of Ohio requires certain disclosures and signatures from all buyers and sellers in order for the purchase agreement to be legally binding. Under Ohio law, all purchase agreements must be in writing and signed by the parties. When a contract is in writing and is signed by the party to be charged, Ohio law stipulates that it is not necessary for the contract to be sealed, acknowledged or verified.
Ohio law also requires the parties to attach a Seller’s Disclosure (also called a Real Property Disclosure) (ORC 5302.30) to the purchase agreement disclosing the condition of the property, especially its structure and fixtures. These disclosures must be drafted or reviewed by a licensed attorney and meet very specific standards set out by the Ohio Revised Code so as to be legally binding.
According to Ohio law, these forms must be signed by the seller and the buyer and returned to the seller before the purchase agreement can be signed. If the parties have additional clauses that they would like to be included in the purchase agreement they may do so after referring to the terms of this state-specific purchase agreement.
The State of Ohio has included additional requirements for boilerplate clauses in purchase agreements. This includes:

**Typical Contingencies for Ohio Purchase Contracts**

Typical contingencies include home inspection, financing and appraisal.
Home Inspection Contingency
A buyer will typically include a home inspection contingency in the purchase agreement to reserve the right to have the home professionally inspected before closing. In Ohio, a buyer has 10 days after the effective date of the purchase agreement to conduct inspections of the property and must do so during the period specified in the purchase agreement. The seller is required to provide written notice of any lead-based paint hazards contained on the property to the buyer within this same timeframe. The inspection period is a not a period of exclusivity for the buyer, however, and if the seller wants to obtain another purchase agreement for the property, he or she can give the buyer notice of the intent to cancel the existing purchase agreement at any time during the inspection period. The seller must then provide the buyer 5 days’ notice of the seller’s intent to cancel in the event that the buyer fails to deliver a signed addendum indicating the buyer’s intent to move forward with the sale unless there are known defects that were not previously disclosed by the seller. If the seller properly gives this notice, he or she can enter into another purchase agreement with a third-party buyer upon expiration of the notice period.
Following the issuance of the notice of intent to cancel the purchase agreement, the buyer retains the right to terminate the existing purchase agreement by providing the seller with a signed addendum to the purchase agreement, in which the buyer agrees to proceed with the transaction as originally set forth, or as modified through the negotiation of an addendum to the purchase agreement. If such an addendum is not provided to the seller, the purchase agreement is canceled upon expiration of the seller’s notice period.
The standard Ohio Association of Realtors purchase agreement does not give the buyer the right to have the home re-inspected at closing. Thus, if the buyer wants to reserve this right, it must be added as a special provision.
Loan Contingency
A purchase agreement typically includes a loan contingency that provides out that the sale is contingent upon the buyer obtaining mortgage financing. The buyer must apply for the loan within 72 hours after the effective date of the purchase agreement, and if the loan is not obtained by the closing date set forth in the agreement, the agreement can be canceled without Liability upon 72 hours’ notice from either party. A properly executed addendum from the buyer agreeing to extend the closing date is typically required to proceed with the sale in the event that the loan is not timely obtained. Be careful to include this right in the purchase agreement as a right of either party, not just a right of the seller.
Appraisal Contingency
If the buyer is obtaining financing through a bank or other traditional lender, the lender will require an appraisal of the property prior to closing. The appraisal contingency is typically included in the loan contingency discussed above.

**The Role of Your Real Estate Agent**

Purchasing real estate is one of the most significant transactions in most people’s lives. That’s why working with a licensed real estate agent often makes sense. With their experience and knowledge, a qualified agent can help you draft a clear, well-written purchase agreement, protect your interests, and guide you through the rest of the closing processs.
In Ohio, a licensed real estate agent is responsible for preparing the majority of the standard purchase agreement. The "Ohio Association of Realtors Purchase Agreement" or "OAR Purchase Agreement", another name for the standard Ohio purchase agreement, is the form that is primarily used throughout much of the state.
While the form does contain many "boilerplate" provisions which are standard in most any real estate agreement, an experienced or educated agent can draft work in the appropriate provisions to the agreement to suit your personal needs and the specific concern of each transaction. Since many forms of agreement are standardized , it’s unlikely they contain enough language to address every contingency for purchase agreements. Working with an agent will make sure the most beneficial terms and conditions are included in the final agreement.
While most standard purchase agreements will include those provisions which apply to monetary damages, a skilled agent will advise you to provide contingencies or terms to help hold sellers accountable. The payment of attorney fees, seller’s responsibility to repair if the property is not as represented, disclosure of defects, and other agreement revisions are often necessary. When selling your home, it’s just as important to cover your own bases. For instance, if the buyer is unable to actually purchase the home (e.g. – loan cannot be obtained), for a variety of reasons, the agent can work to revise the purchase agreement to protect the seller if the buyer backs out. A real estate agent may also recommend the use of additional documents with the agreement, such as the "OAR Residential Property Disclosure Form". It’s also worth noting that depending on the size of the real estate transaction, a licensed real estate attorney may be more suited to handle the transaction.

**Dispute Resolution & Termination**

In the event of a dispute among the parties, that dispute may be submitted to mediation through a process requiring that the parties share equally the costs of the mediator, unless otherwise agreed by the parties. In some purchase agreement forms, the purchase agreement provides for an efficient system that permits a party, in writing, to submit any dispute to the board of realtors or other professional organization in the local area where the property is located, unless the parties to that organization agree to an alternative resolution such as arbitration. In the event that the mediation fails, a party may be entitled to terminate the purchase agreement immediately, unless otherwise removed from that right by prior agreement.
In some purchase agreement forms, a party has the option, but certainly not the obligation, to submit a dispute to a court of competent jurisdiction, within the applicable period of time established with the statute of limitations with respect to the nature of the lawsuit that might be brought. That requirement eliminates the option to submit the dispute to an arbitrator or to some other dispute resolution process because if such a requirement was in effect the statute of limitations would ordinarily have run on the dispute if the statute of limitations was longer than the time to submit it to an arbitrator or through another form of dispute resolution process. The right to proceed in court terminates in some purchase agreement forms after a party fails to timely submit that same dispute through the mediation process. Thus, if a party brings a lawsuit within the specified time that the lawsuit must be brought, the other party is then prevented from countering with its own dispute through the dispute resolution process, and is therefore precluded from filing its own lawsuit, if the party has failed to timely initiate the mediation process.
In some purchase agreement forms, a party has the right to exercise an option to terminate the purchase agreement. If that right is exercised, unless the parties have agreed otherwise, the parties have no further obligation to each other. Termination is thus absolute. It is possible, however, for the parties to amend their purchase agreement to provide that even though the right to terminate the agreement is exercised, that the parties remain bound to continue to perform under the purchase agreement if the amendment so provides.

**Suggestions for Buyers & Sellers**

As with most contracts and forms, there are plenty of opportunities for buyers and sellers to misstep. For the seller, one of the most significant checks is use of the correct form. Ohio sellers should not use some other uniform residential purchase agreement from a neighboring state.
Buyers are in a much better position, receiving the majority of contract protections. Therefore, holding up the negotiation or failing to sign only hurts the seller. However, buyers should keep several practical considerations in mind in their negotiations.
Buyers can unconditionally agree to the contract at any time until it becomes void or is signed by the seller. Revocation before acceptance is ineffective without the seller’s consent. This means that even if the buyer gets an offer signed by the seller and then changes their mind, they may not be able to simply withdraw their assent.
After signing, the contract is essentially binding . Buyers should have confidence in what they are offering and to what, as the buyer is stuck unless the seller agrees to release them.
Keep in mind that the earnest money deposit is nonrefundable, unless the sale does not close for a reason allowed in the contract, such as the buyer terminating the agreement due to a low appraisal or inspections. Even if the buyer could prove the seller was responsible for the failure to close, it would be difficult (and expensive) to recover the earnest money.
Another issue for buyers is forfeiture of the earnest money. At any time, the seller may forfeit the deposit for the exclusive remedy for breach and rescind the contract if the buyer does not do any of the following:
Sellers should remember that contracts require good faith and fair dealings, so their acceptance and any communications about the timeframe strictly enforced by Ohio law cannot be disregarded or used to pressure a buyer into a decision. The more likely a seller is to insist on strict performance, the more likely they are to face litigation.