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Home Sale Contracts

Two people signing documents for house purchase sitting in front of a real estate agent.

A home sale contract is a written agreement between a seller and a homebuyer for a home purchase. The real estate purchase agreement helps all home sale parties avoid post-sale issues, such as a faulty title or a termite infestation.

Buyers and sellers have a few options to create the final agreement. Hiring a real estate attorney is the best option. An experienced real estate attorney understands all aspects of real estate transactions and what to include in a contract.

Another option is using a standard form. Some real estate agents use a standard form containing some required language. While these forms may include specific requirements for a home sale, they are no substitute for legal advice.

This article explores some of the elements of a real estate purchase agreement.

Due Diligence

Before entering into a binding contract, the homebuyer should do their due diligence. Do not solely rely on the Realtor or homeowner to provide details on the home's condition. Resources such as a title company or professional home inspector can help buyers avoid significant issues.


Although the title on most homes transfers via a warranty deed, the homebuyer should contact a title company for a title search. Warranty deeds confirm the seller is the rightful owner of the property. Title companies search public records to confirm the rightful owner and ensure no encumbrances on the real property. Title searches can uncover the following:

  • Liens
  • Property tax assessments
  • Restrictive covenants
  • Easements

Title insurance provides an extra layer of protection in case the title report is incomplete. For example, if a title search overlooks a lien, the lienholder has a superior claim to the property. The buyer can clear up the lien and the title with title insurance.


Although buyers and sellers rely on good faith in real estate transactions, both parties should contact professional home inspectors to confirm the property's condition. Home inspectors can check for damage, mold, asbestos, termites, and potential structural problems. Once the home inspection is complete, the inspector will create a report. Both parties will have an objective inspection report before agreeing.

Real Estate Sales Contract Elements

A real estate purchase agreement should include details to protect the buyer and seller. While the exact details of the agreement depend on the parties, a few elements are common to real estate sales contracts. These elements include:

  • The legal description of the property
  • The purchase price for the property
  • The effective date of the contract
  • The date the buyer can take possession of the property (the closing date)
  • The names of the escrow agent and closing agent
  • Who pays closing costs on the deal
  • The buyer's earnest money deposit (money that shows they are serious about buying the house)
  • Inspection contingency
  • A clause for common contingencies (for example, if the buyer can't obtain financing by a specific date, a contingency clause allows the seller to back out of the deal)

Optional Elements

The parties can use an addendum or appendix for lead-based paint disclosures. Under federal law, a homeowner must disclose the existence of lead paint before entering into a home sale agreement. The addendum can also include an itemized list of personal property included in the purchase price.

The contract does not have to include specific financial information, such as down payment or counteroffers. In a separate agreement, the lender will include the details of a mortgage loan, including the type of loan and the interest rate.

Get Help

A real estate purchase contract is legally binding. When you enter into a contract, you agree to all of the terms of the agreement. A template is a helpful guide for negotiations but cannot replace legal counsel. Speak to an experienced local real estate attorney before you sign a real estate sales contract.

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Contact a qualified real estate attorney to help guide you through the home buying process.

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