To fill out a real estate purchase agreement, work through a state-appropriate written form in order: identify the parties and property, write in the price and earnest money, describe the financing, set each contingency with a deadline, attach the required disclosures, list what stays with the home, fix the closing costs and dates, and sign. Every section has to be on paper, and the details have to match what was actually negotiated. A verbal deal will not carry you.
That last point is not a formality. Contracts for the sale of land fall under the Statute of Frauds, which requires them to be in writing and signed by the parties bound by the agreement.1Legal Information Institute. Statute of Frauds Handshake terms are not enforceable, no matter how clear they seemed at the time.
Start With a Form Built for Your State
Standard purchase agreement forms are available through state real estate commission websites, licensed agents, and legal forms providers. Using a form written for your state helps make sure the provisions local law expects are actually in the document. Most forms follow the same structure: party identification, property description, financial terms, contingencies, disclosures, and closing details.
Read the entire form before you write anything in it. Understanding how the sections connect keeps you from filling in a number in one place that contradicts a deadline in another.
Identifying the Parties and the Property
Enter the full legal names of every buyer and seller exactly as they appear on government-issued identification. If a buyer is purchasing through an LLC or trust, the entity name belongs on that line. Include current mailing addresses and contact information for each party. Nicknames and informal names cause problems later, because this section establishes who has legal obligations under the contract.
The property description needs more than a street address. The street address, city, state, and zip code are a quick reference, but the agreement also needs the legal description found on the existing deed or title report. Depending on where the property is and how the land was originally surveyed, that description takes one of several forms: a lot and block reference tied to a recorded plat map, a metes and bounds description that traces the boundaries by distances and compass directions, or a section-township-range description common in rural areas. Copy the legal description verbatim from the deed. Small transcription errors create title issues later.
Writing In the Price, Deposit, and Financing
Write the purchase price in both numbers and words, the way you would on a check. This is the figure every other financial term in the agreement points back to, so ambiguity here is expensive.
Next comes the earnest money deposit, typically between 1% and 3% of the purchase price. The funds go into an escrow account held by a neutral third party, usually a title company or the seller’s brokerage. If the sale closes, the deposit is credited toward the down payment or closing costs. If the buyer walks away without a valid contractual reason, the seller may be entitled to keep it. Specify the deposit amount, who holds the funds, and the deadline for delivery.
The financing section describes how the buyer plans to pay. For a mortgage, note the loan type (conventional, FHA, VA, or another program) and the approximate loan amount. Most contracts also set a deadline for the buyer to obtain a loan commitment, which ties into the financing contingency below. Cash buyers should indicate that no financing is involved.
Setting the Contingencies and Their Deadlines
Contingencies are conditions that have to be satisfied before the sale becomes final. They act as exit ramps: if a contingency is not met within its deadline, the buyer can walk away without losing the earnest money. Give each contingency a specific deadline and clear language about what counts as satisfaction. Sloppy drafting here causes more disputes than any other part of the agreement.
Inspection Contingency
An inspection contingency gives the buyer a defined window, usually 7 to 10 days, to hire a licensed home inspector and review the property’s condition.2Investopedia. What Is a Home Inspection Contingency and Why Is It Important If the inspection turns up significant defects, the buyer can negotiate repairs, request a price reduction, or cancel the contract without forfeiting the deposit. Waiving this contingency means accepting the property as-is.
Appraisal Contingency
An appraisal contingency protects the buyer if the property appraises for less than the purchase price. Lenders will not finance more than the appraised value, so without this contingency the buyer has to cover the gap out of pocket or lose both the deal and the deposit.
Financing Contingency
A financing contingency lets the buyer cancel if mortgage approval does not come through by a specified date. Without it, a buyer whose loan falls through can lose the earnest money and face a breach-of-contract claim. The agreement should name the loan type, the maximum interest rate the buyer will accept, and the deadline for a written commitment from the lender.
Title Contingency
A title contingency gives the buyer time to review a title search that confirms the seller has the legal right to sell and that no liens, easements, or unresolved disputes cloud the title. If the search turns up an unpaid tax lien, a boundary dispute, or something similar, the buyer can negotiate a fix or exit the deal. Title problems that surface after closing can be extraordinarily expensive.
Attaching the Required Disclosures
Nearly every state requires sellers to complete a written disclosure form listing known material defects: past water damage, roof problems, foundation issues, pest infestations, easements, zoning limitations, and similar items. Timing rules vary, but disclosures are generally required before the buyer signs a binding contract. A seller who knowingly hides a defect can face liability even after closing.
One disclosure is required by federal law regardless of state. For any home built before 1978, the seller must disclose known lead-based paint hazards, provide any records or reports related to lead paint, give the buyer an EPA-approved lead hazard information pamphlet, and allow a 10-day window for a lead inspection or risk assessment.3eCFR. 24 CFR Part 35 Subpart A – Disclosure of Known Lead-Based Paint and/or Lead-Based Paint Hazards Upon Sale or Lease of Residential Property The purchase agreement has to include specific disclosure language and acknowledgment signatures. Most standard forms include a lead paint addendum for this reason.
Listing What Stays With the Home
A fixture, meaning something permanently attached to the property, transfers with the home unless the agreement says otherwise. Built-in bookshelves, ceiling fans, light fixtures, and landscaping are typical examples. Personal property such as furniture or portable appliances does not transfer unless it is specifically included.
The lines blur fast. A wall-mounted TV bracket is probably a fixture; the TV itself is not. The cleanest approach is to list any item that could cause confusion: the refrigerator, the washer and dryer, window treatments, a storage shed, a hot tub. If the seller’s antique chandelier is going with them, say so in writing. Leaving it to common sense invites a dispute at the closing table.
Filling In Closing Costs, Prorations, and Dates
Buyers should expect to pay roughly 2% to 5% of the purchase price in closing costs, covering items like loan origination fees, the appraisal, the lender’s title insurance policy, recording fees, and prepaid interest and escrow deposits. Sellers typically pay the real estate brokerage commission, any agreed-upon repair credits, transfer taxes where applicable, and the owner’s title insurance policy in markets where that is customary. Specify who pays which costs, because local custom varies widely.
Property taxes are prorated between buyer and seller at closing based on how many days each party owned the property during the tax year. The usual method divides the annual tax bill by 365 to get a daily rate and multiplies by the number of days each side held ownership. If taxes have already been paid for a period the buyer will own the home, the seller gets a credit. If taxes are paid in arrears and the seller has not paid, the seller owes the buyer a credit. State whether the proration uses the current year’s tax bill or the prior year’s as an estimate, since final bills may not be ready at closing.
The closing date and the possession date both need to be stated clearly, and they are not always the same day. Some agreements give the seller a few days after closing to vacate; others let the buyer take early possession. If the agreement includes a “time is of the essence” clause, missing the closing date is treated as a material breach, not an inconvenience. Both parties should understand that before agreeing to a specific date.
Counter-Offers, Amendments, and Addenda
A signed offer is not a done deal until the other side accepts it without changes. If the seller modifies any term, the counter-offer legally voids the original offer and creates a new proposal. The original terms are gone; the buyer cannot go back and accept them unless the seller agrees to revive them.
Once both sides have signed, changes happen through amendments or addenda. An addendum adds new terms, like a lead paint disclosure form, without altering existing ones. An amendment changes, removes, or revises terms already in the signed contract, such as adjusting the price or extending the closing date. Every party who signed the original agreement has to sign the addendum or amendment for it to be enforceable. Verbal side agreements carry no weight, for the same Statute of Frauds reasons that require the original contract to be written.
Writing In the Default and Remedies Clause
The agreement should say what happens if either party fails to perform. If the buyer defaults, meaning they refuse to close without a valid contingency, the seller’s most common remedy is keeping the earnest money as liquidated damages. Liquidated damages clauses set a pre-agreed compensation amount so both sides avoid a prolonged fight over actual losses. The amount has to reasonably reflect expected losses, and both parties have to agree to the terms in advance.
If the seller defaults by refusing to transfer the property despite a valid contract, the buyer can seek specific performance, a court order compelling the seller to go through with the sale. The buyer can alternatively pursue monetary damages covering the price difference if they have to buy a comparable property at a higher price, along with wasted fees for inspections, appraisals, and loan applications.
Reviewing and Signing
Before anyone signs, read every line of the completed agreement. Compare the names, addresses, legal description, purchase price, earnest money amount, contingency deadlines, and closing date against what was actually negotiated. Errors in pre-printed forms and last-minute changes that did not get carried through to every section are more common than most people expect. Corrections should be made and initialed by all parties before signing.
Every buyer and seller named in the contract has to sign at the designated spaces. Some forms also require initials on each page or next to handwritten changes. The agreement becomes legally binding once all required signatures are in place. Prepare enough copies of the fully executed agreement so that each party, their agents, and the title or escrow company have an original. Prompt distribution keeps everyone on the same timeline into closing.