Take advantage of our free Real Estate Purchase Agreement template to complete a formal transaction of a property. Our online tool makes the process of creating your contract simple.
Last Update January 13th, 2023
- What Is a Real Estate Agreement
- When is a Real Estate Purchase Agreement needed
- What to Include in a Purchase Agreement for Real Estate
- How to Write a Real Estate Purchase Agreement
- Buyer Beware
- Real Estate Purchase Agreement Addendums and Disclosures
- Real Estate Purchase Agreement Sample
- Other Real Estate Documents
- FAQs About Real Estate Purchase Agreements
What Is a Real Estate Agreement
A Real Estate Agreement is a legal document that sets the terms and conditions of the sale of a home or other type of property.
The document is also known as a:
Home Sale Contract
Real Estate Purchase Contract
Real Estate Sales Contract
In most cases, the buyer will send the form that lists the terms and conditions of the transaction, and then it is up to the seller to accept or reject the agreement.
By signing the binding contract, the other party becomes obligated to complete the sale of the property.
The document does not finalize the transfer of the property, however, it is the first step in completing a real estate transaction.
Take advantage of our easy-to-use Real Estate Purchase Agreement template to create your document.
When is a Real Estate Purchase Agreement needed
If you are interested in buying any type of real estate, using this agreement will be necessary.
You should use a Real Estate Purchase Agreement if any of the following apply to you:
You are completing a property transaction
You must set the terms and conditions of the sale
The sale is done with a family member
You can complete a Simple Real Estate Purchase Agreement if the property’s construction is finished before the contract’s closing date.
Who Prepares the Real Estate Purchase Agreement
In many cases, Real Estate Purchase Agreements are prepared by a real estate agent from scratch.
If the owner of the property is the one selling, then a buyer’s agent could prepare the paperwork as a “dual agency.”
Save both time and money by using our Residential Real Estate Purchase Agreement template to use yourself or provide to your agent.
What to Include in a Purchase Agreement for Real Estate
Your Real Estate Purchase Agreement must include all the necessary details. To ensure you have a binding contract, review what to include in your agreement below.
Information of the parties: The full names and contact details of the buyer and seller.
Property address: The property’s location and a legal description of the land.
Purchase price: The total price of the property, which includes deposits or adjustments.
Personal property: Property that’s included in the sale, for example, a television or beds.
Representations and warranties: Specific claims regarding the property’s condition.
Financing: The buyer could use third-party financing or seller financing, or the buyer could assume the seller’s existing mortgage.
Contingencies: Any actions or conditions that must be fulfilled for the contract to be created.
Title insurance: A form of insurance that covers any loss of value if any defects are found later on in the title.
Closing and possession dates: The day the legal transfer will occur and when the buyer will be given possession of the property.
Lead-based paint disclosure: This is an obligatory disclosure for homes constructed before 1978.
How to Write a Real Estate Purchase Agreement
It is essential to know how to fill out a Real Estate Purchase Agreement correctly, if you plan to create a document yourself or for your agent.
It is not extremely difficult to write your agreement, especially when using a template, however, you must follow all the steps below to not leave anything out.
Include the date and parties: Write the date the agreement will take place, and name the buyer(s) and the seller(s) of the property.
Enter the property details: Write a description of the personal property that will be sold.
Add the payment: Include how much the property will be sold for and what method of payment you will use (cash, personal check, money order, etc.), as well as what the payment schedule will be.
Include the delivery date: Add the date that the personal property will be delivered to the other party.
Add where to send any notices: Include the name of the seller(s) and purchaser(s), and their addresses.
Mention how disputes could be settled: Provide choices of how disputes can be resolved, for example, by mediation or arbitration.
Sign the document: Write the names and dates of both parties and then each can sign the document.
Simplify the writing process with LawDistrict’s Real Estate Purchase Agreement template.
Certain states do not require the seller to mention material defects in the real estate property.
If you are purchasing property in one of these states, it does not mean you need to take a gamble.
Take care to verify that you can get out of an agreement if conditions aren't met, such as the owner not repairing part of the property or if there has been no inspection.
The following states qualify as “Buyer Beware” states:
Having the property inspected before signing any agreement will be important if you are purchasing a home in one of these states.
Real Estate Purchase Agreement Addendums and Disclosures
Every state has different requirements regarding disclosures. Understanding the different addendums and disclosures can help save you money if you aren’t disclosed information regarding the condition of the property you are purchasing.
Review the following addendums and disclosures to make a smart purchase of a property.
Purchase Agreement Termination Letter – Indicates that the Real Estate Purchase Agreement is no longer binding if it is terminated.
Inspection Contingency – The purchasing party can determine if there are any major problems with the property. If there are any defects with the real estate, the parties can negotiate to fix/credit the issue, or the buyer can pull out of the contract.
Closing Date Extension – This addendum is used when both parties agree to extend the closing date.
Release of Earnest Money – A form that both parties sign for the Buyer to release the earnest money deposit to the Seller.
Earnest Holdback Agreement – Outlines rules for money that is pending to be released or being withheld by the title or escrow company until the selling party finishes all tasks, responsibilities, and duties before the closing takes place. Meanwhile, interest can be earned and held in an escrow account, and interest shall be paid to the Buyer.
Third-Party Financing – Mentions the conditions of a loan and makes the contract contingent upon the loan being approved by the party lending the money.
Seller Financing – This occurs when the seller finances the sale and the price is payable over time.
Short Sale – This takes place when a seller must pay back more money than what the property is worth.
Property Disclosure Statement – Required in the majority of states, apart from Buyer Beware states, the seller must disclose any issues or defects on the property.
Lead-Based Paint Disclosure – In each state, a lead-based paint hazard must be disclosed if the home was constructed before 1978.
Real Estate Purchase Agreement Sample
To help you write your document, you can have look at the example of a Real Estate Purchase Agreement that we have provided below.
Review the sample below to understand how to outline your document correctly.
Other Real Estate Documents
There are similar legal documents that may be of help to you during a real estate transaction.
Review these documents to ensure that any property purchase that you undergo is done legally and with as little difficulty as possible.
Browse LawDistrict’s legal library that contains information and templates and skip excessive legal fees.
FAQs About Real Estate Purchase Agreements
To clear up any doubts you may have regarding Real Estate Purchase Agreements, we have answered some of the most common questions on the subject.
Have a look at the responses to further understand how to create your document.
When does a Real Estate Purchase Agreement expire?
An offer for a seller to sign an agreement could expire by a certain date.
When creating your Real Estate Purchase Agreement, you can set a due date. If the seller doesn’t agree to it by that date, then the offer will have expired.
You can also add the exact time it will expire on the due date.
Where can I get a Real Estate Purchase Agreement?
If you plan on having a Real Estate Purchase Agreement created from scratch, then you can go to a real estate agent.
However, having an agent create one from scratch could be costly.
You can create your very own document by using our Real Estate Purchase Agreement template and save your time and skip the extra fees.
Is a Real Estate Purchase Agreement binding?
Yes, a Real Estate Purchase Agreement is binding. There are consequences for a party who backs out of the agreement if they signed a contract. These consequences could include paying a fee, for example.
This type of agreement does not need to be signed in front of a notary or witnesses in most cases, although it would not be a bad idea to do so.