- In real estate, a purchase agreement is a binding contract between a buyer and seller that outlines the details of a home sale transaction.
- Typically, the buyer’s agent writes up the purchase agreement.
What Is Included In The Real Estate Purchase Agreement?
Every transaction is different, so not all real estate purchase agreements will look the same. However, there are some basic items that should be included in every purchase agreement.
- Buyer and seller information
- Property details
- Pricing and financing
- Fixtures and appliances included/excluded in the sale
- Closing and possession dates
- Earnest money deposit amount
- Closing costs and who is responsible for paying
- Conditions under which the contract can be terminated
- Contingencies or conditions that must be met for the sale to go through
- Financing contingency: Sale is contingent on the buyer being able to obtain financing. Protects the buyer in the case they are unable to secure a mortgage.
- Inspection contingency: Buyer is able to back out of the sale without penalty if they aren’t satisfied with a professional inspector’s assessment of the home.
- Appraisal contingency: States that the home must appraise at a value equal to or higher than what the buyer agreed to pay.
- Home sale contingency: The home purchase is contingent on the buyer’s ability to sell their current home.