Purchase Agreements – One-to-Four Residential Units (Short Form and Principal to Principal) – Form 155 and 157
Selecting the correct purchase agreement
A new real estate agent’s entry into the vocation of soliciting and negotiating real estate transactions typically begins with the marketing and locating of single family residences (SFRs) as a seller’s or buyer’s agent.
Other properties an agent might work with include:
- one-to-four unit residential properties;
- commercial income properties (office buildings, retail units and industrial space);
- agricultural property; or
- vacant parcels of land.
For real estate sales conveying ownership of a property, the primary document used to negotiate the transaction between a buyer and seller is a purchase agreement. Different types of properties require the use of a different type of purchase agreement containing provisions necessary to negotiate the sale of that particular type of property. [See RPI Form 150 – 159-2]
Three basic categories of purchase agreements exist for documenting real estate sales transactions. The categories are influenced by legislation and court decisions addressing the handling of the buyer protection disclosures and the different due diligence investigations taken when marketing a property.
The three categories of purchase agreements are for:
- one-to-four unit residential property sales transactions;
- other than one-to-four unit residential property sales transactions, such as for residential and commercial income properties and owner-occupied business/farming properties; and
- land acquisition transactions.
Within each category of purchase agreements, several variations exist. The variations cater to the specialized use of some properties, the diverse arrangements for payment of the price and to the ownership conditions which affect transactions, particularly within the one-to-four unit residential property category.