Legal Definitions - purchase

Purchase (noun)

In its most common sense, a purchase is the act or an instance of acquiring something, usually in exchange for money or another valuable consideration. Legally, especially when referring to real estate, purchase also describes the acquisition of property through any means other than inheriting it from a deceased person. This can include buying it, receiving it as a gift, or being granted it through a will.

Here are a few examples to illustrate the concept of a purchase:

• Example 1: Everyday Transaction

  A customer goes to a bookstore and buys a new novel. The exchange of money for the book constitutes a purchase.

  Explanation: This illustrates the most common understanding of a purchase – a transaction where goods are acquired by paying for them.

• Example 2: Real Estate Acquisition

  A couple signs a contract and pays a substantial sum to acquire a plot of land on which they plan to build their dream home. This acquisition of land is a purchase.

  Explanation: This demonstrates a purchase in the context of real property. The couple acquired the land through a direct transaction (buying), which is distinct from receiving it as an inheritance after someone's death.

• Example 3: Property Acquisition by Gift

  A parent formally transfers ownership of their vacation cabin to their adult child as a gift, without any money changing hands. From a legal standpoint, the child's acquisition of the cabin is considered a purchase.

  Explanation: This highlights the specific legal meaning of purchase in real estate. Even though no money was exchanged, the child acquired the property through an intentional act (a gift) rather than through the laws of inheritance. Therefore, in legal terms, it's classified as a purchase.