Purchase & Sale Agreement
Purchase and Sale Agreement (PSA) — Key Business Terms Summary
A one-page summary of the negotiated business terms for a property acquisition — price, deposit structure, due diligence, closing, and default remedies — that a broker prepares from an accepted LOI to give both sides' attorneys a shared, already-aligned starting point for drafting the full Purchase and Sale Agreement.
When to use this
Prepare this immediately after the LOI is accepted and before either attorney starts drafting the PSA, translating the LOI's loose business language into the specific mechanics a 40-page contract actually needs -- exact deposit tranches and their refundability triggers, a fixed title objection deadline, a dollar-denominated survival cap. Skip this step and each attorney fills the gaps the LOI left open with their own client-favorable default, turning what should be a routine drafting exercise into weeks of redlines relitigating points the principals thought were already settled. It also forces the broker to catch the single most common defect in an LOI-to-PSA handoff: a phrase like "reasonable extension" or "standard survival period" that sounded fine in the LOI but has no agreed number behind it -- exactly the kind of gap that stalls a deal at the attorney level while the principals wonder why their signed LOI didn't prevent it.
PURCHASE AND SALE AGREEMENT -- KEY BUSINESS TERMS SUMMARY
(Prepared for Attorney PSA Drafting -- Not a Binding Agreement)
Property: [PROPERTY NAME / ADDRESS]
Purchase Price: $[PURCHASE PRICE]
Prepared By: [BROKER NAME], [BROKERAGE FIRM]
Date Prepared: [DATE]
Basis: Letter of Intent dated [LOI DATE], accepted by Seller
Distribution: [BUYER ENTITY NAME] / [BUYER COUNSEL FIRM] -- [SELLER ENTITY NAME] / [SELLER COUNSEL FIRM]
This summary reflects the principal business terms the parties have agreed upon following the Letter of Intent referenced above. It is provided to each party's counsel as the starting point for drafting the definitive Purchase and Sale Agreement (the "PSA") and is not itself a binding contract or an offer.
1. PARTIES
Buyer: [BUYER ENTITY NAME], a [STATE] limited liability company
Buyer Contact: [NAME], [TITLE] -- [PHONE] / [EMAIL]
Buyer Counsel: [NAME], [LAW FIRM] -- [PHONE] / [EMAIL]
Seller: [SELLER ENTITY NAME], a [STATE] limited liability company
Seller Contact: [NAME], [TITLE] -- [PHONE] / [EMAIL]
Seller Counsel: [NAME], [LAW FIRM] -- [PHONE] / [EMAIL]
2. PROPERTY
[PROPERTY NAME], a [NUMBER]-unit [PROPERTY TYPE] located at [ADDRESS], consisting of approximately [SQUARE FOOTAGE] rentable square feet, together with all improvements, fixtures, and appurtenant rights (the "Property"). Tax Parcel ID: [PARCEL ID].
3. PURCHASE PRICE AND DEPOSIT STRUCTURE
Purchase Price: $[PURCHASE PRICE]
DEPOSIT SCHEDULE
ITEM AMOUNT DUE
Initial Deposit $[AMOUNT] [NUMBER] business days after PSA execution ("Effective Date")
Additional Deposit $[AMOUNT] [NUMBER] business days after expiration of the Due Diligence
Period, if the PSA has not been terminated
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TOTAL DEPOSIT $[AMOUNT] [PERCENT]% of Purchase Price
Balance Due at Closing $[AMOUNT] Cash at Closing, subject to prorations and customary
adjustments
Escrow Agent: [TITLE/ESCROW COMPANY NAME]
Refundability Triggers: The Deposit (Initial Deposit, and Additional Deposit once paid) is refundable to Buyer in full if: (a) Buyer terminates during the Due Diligence Period; (b) Seller fails to timely cure a title/survey objection under Section 5; (c) Buyer exercises its termination right under Section 8 (casualty/condemnation); (d) a closing condition benefiting Buyer is not satisfied or waived; or (e) Seller defaults under the PSA. Once the Additional Deposit has been paid and none of the foregoing applies, the Deposit becomes non-refundable and is credited toward the Purchase Price at Closing.
4. DUE DILIGENCE PERIOD
Buyer shall have [NUMBER] days from the Effective Date (the "Due Diligence Period") to inspect the Property and review all financial, physical, environmental, and title/survey materials, and may terminate the PSA for any reason or no reason during this period with a full refund of the Initial Deposit.
Due Diligence Period: [START DATE] through [END DATE] ([NUMBER] days).
5. TITLE AND SURVEY OBJECTION PROCEDURE
Title Commitment / Survey Delivery: Within [NUMBER] business days after the Effective Date.
Objection Deadline: [NUMBER] days after the Effective Date.
Seller's Cure Period: [NUMBER] business days after receipt of Buyer's written
objection notice.
Buyer's Remedy if Uncured: Terminate the PSA and receive a full refund of the Deposit
(regardless of Due Diligence Period status), or waive the
uncured matter(s) and proceed to Closing.
6. CLOSING DATE AND EXTENSION RIGHTS
Scheduled Closing Date: [NUMBER] days after expiration of the Due Diligence Period (anticipated: [DATE]).
Extension Rights:
(a) Title Cure Extension -- the Closing Date extends day-for-day for any Seller cure period under
Section 5, not to exceed [NUMBER] days in the aggregate.
(b) Buyer's One-Time Extension Option -- Buyer may extend the Closing Date by up to [NUMBER] days
upon (i) written notice to Seller at least [NUMBER] business days before the scheduled Closing
Date, and (ii) payment of a $[AMOUNT] non-refundable extension fee, credited toward the
Purchase Price at Closing.
(c) Outside Date -- Closing shall occur no later than [DATE], absent the parties' mutual written
agreement to extend further.
7. REPRESENTATIONS AND WARRANTIES SURVIVAL
Survival Period: [NUMBER] months after Closing (through [DATE]).
Cap on Liability: $[AMOUNT] ([PERCENT]% of Purchase Price).
Basket: Claims must exceed $[AMOUNT] in the aggregate before Buyer may recover, at
which point recoverable from the first dollar up to the Cap.
8. CASUALTY AND CONDEMNATION
Risk of loss remains with Seller until Closing. A casualty or condemnation is deemed "Material" if [DEFINE THRESHOLD -- e.g., cost to repair/restore exceeds a stated % of Purchase Price, or the event affects a stated number of units, eliminates required parking, or materially impairs access].
If Material: Buyer may elect to (a) terminate the PSA and receive a full refund of the Deposit,
or (b) proceed to Closing and receive an assignment of insurance proceeds or the
condemnation award, plus a credit for any deductible.
If Immaterial: The parties proceed to Closing; Seller assigns insurance proceeds or the
condemnation award to Buyer, with a credit for any deductible or self-insured
retention.
9. ASSIGNMENT
Buyer may assign the PSA to an Affiliate (an entity controlled by, controlling, or under common control with Buyer or its principals) without Seller's consent, upon [NUMBER] business days' prior written notice to Seller. Assignment to a non-affiliated third party requires Seller's prior written consent, not to be unreasonably withheld, conditioned, or delayed. No assignment relieves the original Buyer of its obligations under the PSA absent Seller's written release.
10. DEFAULT AND REMEDIES
Buyer Default: Seller's sole and exclusive remedy is to terminate the PSA and retain the
Deposit (or such portion as has been paid at the time of default) as liquidated
damages, the parties agreeing that Seller's actual damages would be difficult to
ascertain and that this amount is a reasonable estimate and not a penalty. Seller
waives any claim to additional damages or to specific performance.
Seller Default: Buyer may elect, as its sole remedies, either (a) terminate the PSA and receive
(i) a full refund of the Deposit and (ii) reimbursement of Buyer's actual,
documented third-party due diligence costs up to $[AMOUNT], or (b) pursue an
action for specific performance to compel Seller's conveyance of the Property.
11. BROKERAGE
Buyer's Broker: [BROKERAGE FIRM] ([AGENT NAME]) -- commission of [PERCENT]% of Purchase Price
($[AMOUNT]), payable by [PARTY RESPONSIBLE] at Closing pursuant to a separate
commission agreement dated [DATE].
Seller's Broker: [NAME, or "None -- Seller represented by its in-house disposition team"].
Each party represents to the other that, except as stated above, it has not dealt with any broker in connection with this transaction, and shall indemnify and hold the other harmless against any claim for a commission or fee arising from a breach of this representation.
THIS SUMMARY IS PROVIDED FOR ATTORNEY PSA-DRAFTING PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE A BINDING AGREEMENT BETWEEN THE PARTIES.
Reviewed and approved as to business terms only (this signature block does not execute a PSA):
_______________________________ _______________________________
[BUYER SIGNATORY NAME], [TITLE] [SELLER SIGNATORY NAME], [TITLE]
[BUYER ENTITY NAME] [SELLER ENTITY NAME]
Date: _______________ Date: _______________
Prepared By: [BROKER NAME], [BROKERAGE FIRM] Date: [DATE]