3.1 Virginia Purchase and Sale Agreements
Key Takeaways
- Virginia real estate contracts must be in writing per the Statute of Frauds to be enforceable
- The Virginia Association of REALTORS (VAR) provides standard contract forms used in most residential transactions
- Virginia contracts typically include contingencies for financing, inspections, and home sale
- Earnest money deposits must be deposited promptly in accordance with contract terms
- Virginia follows the "reasonable time" doctrine unless time is of the essence is specified
Real estate contracts in Virginia must meet all standard contract requirements plus Virginia-specific provisions.
Standard Contract Requirements
For a valid Virginia real estate contract:
| Requirement | Description |
|---|---|
| Competent Parties | Legal age (18+) and mental capacity |
| Offer and Acceptance | Meeting of the minds |
| Legal Purpose | Transaction must be lawful |
| Consideration | Something of value exchanged |
| Written Form | Statute of Frauds requires writing |
| Legal Description | Property must be identifiable |
Common Virginia Contract Forms
The Virginia Association of REALTORS (VAR) provides standard forms used in most residential transactions:
Key VAR Form Provisions
| Section | Purpose |
|---|---|
| Purchase Price | Total price and payment terms |
| Earnest Money Deposit | Amount, holder, and deposit timeline |
| Financing Contingency | Loan type, amount, and conditions |
| Home Inspection | Inspection rights and remedies |
| Settlement Date | Closing date and location |
| Additional Terms | Special conditions and provisions |
Earnest Money Deposits
Virginia practice for earnest money:
- Amount is negotiable between parties
- Should be deposited promptly per contract terms
- Held in escrow by broker, title company, or attorney
- Default: typically handled per contract provisions
Note: The contract should specify where funds will be held and the timeline for deposit.
Key Contract Provisions
Time of the Essence
Virginia follows "reasonable time" doctrine by default, meaning:
- Deadlines are important but may allow flexibility
- Minor delays may not be grounds for default
- If contract specifies "time is of the essence," deadlines are strict
To make time of the essence:
- Must be expressly stated in the contract
- All parties must agree
- Late performance can then be grounds for termination
Contingencies
Virginia contracts commonly include:
| Contingency | Purpose |
|---|---|
| Financing | Buyer must obtain satisfactory loan |
| Home Inspection | Buyer may inspect and negotiate repairs |
| Appraisal | Property must appraise at purchase price |
| Home Sale | Buyer must sell existing home first |
Home Inspection Contingency
Virginia buyers typically have the right to:
- Conduct inspections within specified timeframe
- Request repairs or price reduction
- Accept property "as is" for certain items
- Terminate if major defects are found
Financing Contingency
Protects the buyer if:
- Loan application is denied
- Interest rate exceeds specified maximum
- Loan terms are unacceptable
- Appraisal comes in below purchase price
Contract Amendments
Changes to the contract after signing require:
| Change Type | Method |
|---|---|
| Before acceptance | Counter-offer or new offer |
| After binding agreement | Written amendment signed by all parties |
| Extension of deadlines | Addendum or amendment |
| Material changes | Requires written agreement |
When the Contract Becomes Binding
A Virginia purchase contract becomes binding when:
- All parties have signed the agreement
- Acceptance is communicated to the offering party
- Delivery of signed contract is completed
Important: An offer can be revoked at any time before acceptance is communicated.
In Virginia, what is required for a real estate contract to be enforceable?
What is Virginia's default rule regarding contract deadlines?