Real Estate Purchase Agreement Template
A Real Estate Purchase Agreement outlines the terms and conditions of a property sale between a buyer and seller. This important document protects both parties by recording key details like price, closing date, and contingencies.
Download a free, customizable template in Word or PDF format and create your agreement today.
create your Real Estate Agreement
Download, Print and E-sign your Real Estate Purchase Agreement Template
Table of Contents
- What Is a Real Estate Purchase Agreement?Understanding Real Estate Purchase Agreements
- When Do You Need a Real Estate Purchase Agreement?Situations Where a Real Estate Purchase Agreement Is Essential
- What Happens If You Don’t Have a Real Estate Purchase Agreement?The Risks of an Informal or Incomplete Real Estate Sale
- How to Fill Out a Real Estate Purchase AgreementStep-by-Step Guide to Completing Your Real Estate Contract
- Types of Real Estate Purchase Agreements and Common ConfusionsStandard Residential PurchaseLand Purchase AgreementCommercial Real Estate AgreementKey Confusions to Watch Out For
- Related Documents You May Need
- Frequently Asked Questions
What Is a Real Estate Purchase Agreement?
A Real Estate Purchase Agreement is a legally binding contract that defines the terms under which a piece of real property is sold.
- The names of the buyer and seller
- A description of the property being sold
- The agreed-upon purchase price
- The date when the ownership will officially transfer
- Any conditions that must be met before the sale closes
Importantly, a Real Estate Purchase Agreement protects both parties by making the terms of the transaction clear from the start. It prevents misunderstandings, reduces the risk of legal disputes, and ensures that everyone involved knows their rights and responsibilities.
Without this document, even simple real estate transactions can become legally complicated, costly, and contentious.
When Do You Need a Real Estate Purchase Agreement?
You should use a Real Estate Purchase Agreement whenever real property changes ownership between two parties.
Even informal sales should be formalized with a purchase agreement. A handshake or verbal promise is not enough when dealing with high-value transactions. Without a clear written record of the terms, either party could later claim misunderstandings about price, included fixtures, contingencies, or closing dates.
In fact, many states require a written contract for real estate sales to comply with the "Statute of Frauds" — a legal principle that demands written agreements for transactions involving land
Using a purchase agreement protects your investment, your interests, and your peace of mind.
What Happens If You Don't Have a Real Estate Purchase Agreement?
Failing to use a formal Real Estate Purchase Agreement can create serious problems during — and after — a property transaction.
- 1. Disputes Over Terms:
Without a written agreement, it is very difficult to prove what was agreed upon. One party might claim the sale included certain appliances or property features; another might insist on different payment terms or deadlines.
- 2. Loss of Earnest Money:
Buyers typically place an earnest money deposit to show their commitment. Without clear documentation, recovering that deposit if the deal falls through may be nearly impossible.
- 3. Title and Ownership Issues:
If the agreement does not spell out critical requirements, like a clean title or the transfer of ownership, the buyer could face legal issues down the line, including hidden liens or disputes over boundaries.
- 4. Financing Problems:
Lenders usually require a signed purchase agreement to approve a mortgage loan. Without one, the financing process can stall or collapse entirely.
How to Fill Out a Real Estate Purchase Agreement
- Step 1: Identify the Buyer and Seller
List the full legal names and current addresses of both parties involved. This ensures there is no confusion about who is participating in the transaction.
- Step 2: Describe the Property
Provide the property's full street address, and include its legal description as found in public records or on the title deed. This avoids future disputes about what is being sold.
- Step 3: Set the Purchase Price and Payment Terms
Clearly state the agreed sale price. Outline how payments will be made, including any earnest money deposits, down payments, and how the remaining balance will be handled (e.g., through a mortgage or cash payment).
- Step 4: Add Contingencies
Contingencies protect both the buyer and seller. Common contingencies include:
- The buyer obtaining financing approval
- Satisfactory results from a home inspection
- A clear title report with no encumbrances or liens
Each contingency should have a deadline for completion. - Step 5: Establish the Closing Date and Possession Terms
Decide when the sale will close and when the buyer will take possession of the property. Some agreements allow a short rental period if the seller needs extra time to vacate.
- Step 6: Sign, Witness, and Share Copies
Both the buyer and seller must sign the agreement to make it enforceable. In some cases, notarization or witness signatures may also be required, especially for higher-risk transactions.
By carefully completing these steps, you ensure that the sale process proceeds smoothly and that everyone understands their rights and responsibilities.
Types of Real Estate Purchase Agreements and Common Confusions
Used for typical sales of homes, condos, or townhouses. Covers price, financing, contingencies, and basic property disclosures.
Used when buying undeveloped land. May include special terms regarding zoning, utilities, and environmental conditions.
Designed for properties like office buildings, warehouses, or retail spaces. Often includes clauses about tenant leases, inspections, and business use restrictions.
- Does the purchase agreement guarantee that the sale will happen?
Not automatically. If contingencies aren't satisfied — for example, if financing falls through or a major defect is found — either party may be able to cancel the deal according to the contract's terms.
- Is an earnest money deposit refundable?
It depends. If the buyer backs out for a reason allowed under a contingency (such as failed financing), the deposit is usually refundable. Otherwise, the seller may be entitled to keep it.
- Can the buyer move in before closing?
Only if both parties agree and document the arrangement — often through a "lease-back" or temporary occupancy agreement.
- Does the agreement cover personal property, like appliances?
It should. If any items like refrigerators, washers, or chandeliers are included in the sale, they must be listed clearly in the contract.
Understanding these details helps avoid miscommunications that can delay or derail the closing.
Related Documents You May Need
Depending on your situation, you may also need:
- Seller’s Disclosure Form
Outlines known defects or issues with the property, as required by law in many states.
- Deed of Trust or Warranty Deed
Transfers legal ownership to the buyer after closing.
- Promissory Note
If seller financing is involved, this records the buyer’s loan obligations.
- Temporary Occupancy Agreement
Covers the use of the property between closing and final move-in.
Using these documents alongside your purchase agreement helps ensure a smooth and fully compliant real estate transaction.
Frequently asked questions
Is a Real Estate Purchase Agreement legally binding?
Yes, once both parties sign, it becomes legally enforceable. This means both the buyer and seller must comply with its terms or potentially face legal consequences.
Can I write my own agreement without a lawyer?
Yes. Many people use templates like ours without hiring a lawyer, especially for straightforward sales. However, for complex deals or unusual property types, it may be wise to have a lawyer review the agreement
What if the buyer backs out after signing?
If the buyer breaks the agreement without a valid reason (like a failed contingency), the seller may be entitled to keep the earnest money deposit — or even sue for damages, depending on the contract terms and state law
What’s the difference between this and a bill of sale?
A purchase agreement sets the terms of the deal before the sale happens. A bill of sale is usually issued after the deal closes, serving as a receipt or proof of ownership transfer.
How much earnest money should be included?
This varies, but 1–3% of the purchase price is common. It shows the buyer is serious. The deposit is usually held in escrow and applied to the purchase at closing.
Do I need notarization or witnesses?
Most states do not require the Real Estate Purchase Agreement to be notarized. However, the deed transfer (which happens at closing) usually does require notarization.
Download, Print and E-sign your Real Estate Purchase Agreement Template
Create Template now