Michigan real estate purchase agreement template

A Michigan real estate purchase agreement is a critical document in various real estate transactions within the state. This agreement outlines the terms and conditions under which a property will be bought and sold, ensuring clarity and legal protection for both buyers and sellers. 

In this article, we’ll explore what a Michigan real estate purchase agreement is, its purpose, who manages these contracts, and more. We’ll also discuss the challenges of managing these contracts and how Juro can help streamline the process.

What is a Michigan real estate purchase agreement?

A Michigan real estate purchase agreement is a document used in property transactions within the state. It outlines the terms and conditions of the sale, including details about the buyer, seller, property, price, and closing date. 

Which laws in Michigan are relevant to real estate purchase agreements?

Several laws in Michigan are pertinent to real estate purchase agreements:

• Michigan Landlord and Tenant Relationships Act: This act defines the rights and responsibilities of landlords and tenants.
• Michigan Seller Disclosure Act: Requires sellers to disclose known defects in the property to buyers.
• Michigan Uniform Vendor and Purchaser Risk Act: This law allocates the risk of loss in property transactions.
• Truth in Renting Act: Ensures that rental agreements are fair and clear.
• Real Estate Licensing Law: Governs the licensing of real estate professionals in Michigan.

These laws ensure that real estate transactions are conducted fairly and transparently.

What is the purpose of a Michigan real estate purchase agreement?

A Michigan real estate purchase agreement serves to:

• Establish a legally binding contract – protects both buyer and seller by clearly specifying terms, conditions, and contingencies.
• Provide transaction structure – offers a detailed framework for the sale process, including timelines, financial arrangements, and risk management.
• Ensure legal compliance and disclosures – adheres to Michigan laws and mandates disclosure of property details, ensuring transparency and reducing legal risks.

Who manages Michigan real estate purchase agreements?

Typically, real estate agents assist buyers and sellers in drafting, reviewing, and negotiating agreements. Attorneys provide legal advice and ensure compliance with state laws and title companies handle the closing process and ensure the title is clear for transfer. Brokers supervise transactions and make sure that all documentation is complete. These professionals work together to facilitate a smooth transaction.

Michigan real estate purchase agreement use cases

Below are some common use cases for a Michigan real estate purchase agreement. Each scenario requires specific terms tailored to the nature of the transaction.

Residential property sales

For individuals buying or selling homes, the purchase agreement delineates crucial details – such as the sale price, property condition, financing terms, and contingencies. It ensures both parties understand their obligations and rights, reducing the risk of disputes.

Commercial real estate transactions

In commercial property transactions, this agreement addresses specific needs such as lease terms, zoning compliance, and property inspections. It makes sure both parties agree on essential terms, facilitating smoother transactions and preventing potential legal issues.

Investment property acquisitions

Investors purchasing rental properties or properties for resale use this agreement to specify terms related to tenant leases, income expectations, and property management responsibilities. It helps investors make informed decisions and protects their interests.

New construction purchases

When buying newly constructed properties, buyers and builders use the purchase agreement to outline construction timelines, specifications, warranties, and completion dates. This ensures transparency and sets expectations for both parties.

What should a Michigan real estate purchase agreement template include?

A comprehensive Michigan real estate purchase agreement template should include several key components to ensure that the interests of both buyers and sellers are protected and that the transaction complies with state laws. Below is a list of essential elements that should be included:

Property details

• Full address of the property, including county and any additional identifying information.
• Detailed legal description of the property as recorded in public records.

Parties involved

• Full legal name and contact details of the buyer(s).
• Full legal name and contact details of the seller(s).

Purchase price and financing

• Agreed upon sale price of the property.
• Amount of earnest money deposit and conditions for its release.
• Type of financing (e.g. conventional loan, FHA, VA), down payment amount, and any contingencies related to financing approval.

Contingencies

• Provisions for property inspections, including deadlines and conditions for resolving inspection issues.
• Requirement for property appraisal and steps to take if the appraisal does not meet the purchase price.
• Conditions under which the buyer can secure financing and deadlines for obtaining loan approval.

Closing details

• Agreed upon date for the closing of the transaction.
• Breakdown of closing costs and who is responsible for paying each cost (e.g. buyer, seller, or shared).

Property condition and disclosures

• Required seller’s disclosures about the condition of the property, including any known defects or issues.
• Agreement on the condition of the property at the time of sale, including any repairs or improvements to be made by the seller.

Fixtures and personal property

• List of fixtures and personal property included in the sale (e.g. appliances, light fixtures).
• List of items excluded from the sale.

Title and escrow

• Requirement for title insurance and who will pay for it.
• Designation of the escrow agent or title company handling the transaction.

Default and termination

• Consequences of default by either party and remedies available.
• Conditions under which the agreement can be terminated and the process for termination.

Additional terms and conditions

• Whether a home warranty is included and its terms.
• Date and conditions for the buyer to take possession of the property.
• Proration of property taxes, utility bills, and other expenses.

Signatures

• Signature(s) of the buyer(s) and date.
• Signature(s) of the seller(s) and date.

Miscellaneous provisions

• Statement that the agreement is governed by Michigan law.
• Clause stating that the written agreement constitutes the entire agreement between the parties.
• Provision for how amendments to the agreement will be handled and documented.

How are Michigan real estate purchase agreement templates usually managed?

Managing Michigan real estate purchase agreement templates involves several steps:

1. Drafting – Templates are customized to fit the specific transaction.
2. Reviewing – Both parties review the agreement, often with the help of legal professionals.
3. Negotiating – Terms are negotiated and amended as necessary.
4. Executing – Once agreed upon, the document is signed by all parties.
5. Storing – The final agreement is stored securely, often in both digital and physical formats.

Manage Michigan real estate purchase agreements in Juro

Juro’s contract management software offers a comprehensive solution for managing Michigan real estate purchase agreements. Here’s how:

Automated contract templates. Juro allows you to create contracts quickly from pre-defined templates. This saves time and ensures consistency and compliance with Michigan laws.

Approval workflows. Juro’s customizable workflows streamline the approval process, reducing delays and ensuring all necessary stakeholders review and approve the agreements.

Mass actions. Juro enables bulk signing of contracts, allowing stakeholders to sign multiple documents at once. This feature is ideal for managing high volumes of real estate transactions.

Data-rich contract repository. Juro provides a centralized repository for all contracts, offering instant visibility into contract data. This makes it easy to search, filter, and report on agreements.

Alerts and reminders. Automated reminders help you stay on top of important dates, such as closing dates and renewal deadlines.

Integrations. Juro integrates with various real estate tools and CRMs, allowing for seamless data transfer and contract generation.

By leveraging Juro’s contract management software, real estate professionals can improve efficiency, reduce risks, and ensure compliance with Michigan laws. Juro’s features address the specific needs of real estate transactions, making it an ideal solution for managing Michigan real estate purchase agreements.

Juro’s AI-native contract automation platform empowers all teams to create, agree, execute and manage contracts up to 10x faster than traditional tools. To find out more, hit the button below to book your personalized demo.