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May '25 • Banter
PSA on PSA 📜
Public service announcement on Purchase and Sale agreements
On Saturday's Coffee with Paul, we discussed Purchase and Sale Agreements (PSAs) and how to protect yourself during negotiations. Here are three critical issues you should address:
1. Get the Clock Right ⏰
The Due Diligence period should NOT start ticking until you receive these essential documents:
Documents:
- T12 (Trailing 12 months financial statements)
- Current Rent Roll
- Proforma/projections
- Seller's business plan for the property
- 2 Years Tax Returns
- Bank statements
- List of repairs made in the last 2 years
- Utility Bills
- Insurance History
- Service Contracts
- All Current Leases
- Inspection Reports or maintenance records
- Property Survey
Without these documents, you simply cannot make an intelligent decision about the property's value or potential. Make this clear in your PSA!
2. Remove Specific Performance Clauses ✍️
Always remove specific performance clauses from your PSA. This protects you from being forced to complete the purchase if circumstances change.
3. No Personal Guarantees on Notes 🛡️
Ensure there's no personal guarantee on any seller financing notes. The property itself should be the sole remedy for the seller if something goes wrong.
Real-World Success
One of our members just negotiated all three of these protections into their PSA. Smart moves that significantly reduce risk!
What other PSA protections have worked for you? Share your experiences below! 👇
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PSA on PSA 📜
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