{"id":548937,"date":"2026-03-31T00:41:52","date_gmt":"2026-03-31T04:41:52","guid":{"rendered":"https:\/\/www.houzeo.com\/blog\/?p=548937"},"modified":"2026-08-21T12:24:42","modified_gmt":"2026-08-21T16:24:42","slug":"purchase-agreement","status":"publish","type":"post","link":"https:\/\/www.houzeo.com\/blog\/purchase-agreement\/","title":{"rendered":"Selling or Buying a Home? Read the Purchase Agreement First!"},"content":{"rendered":"\n<p class=\"highlight\">Nearly <a   href=\"https:\/\/www.redfin.com\/news\/pending-sales-fall-through-january-2026\/#:~:text=That's%20up%20from%2013.1%25%20a,11.2%25\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">40,000<\/a>! That&#8217;s how many home-purchase agreements were canceled nationwide this past January. As the market slowly shifts in favor of buyers, &#8220;deal-killers&#8221; such as home inspection issues, appraisal gaps, and financial hurdles are becoming more common.<\/p>\n\n\n\n<p>In this changing market, precision matters. Buyers must carefully review the purchase contract. Sellers should make sure the terms are clear and easy to understand, while also being prepared for similar clauses. This can help prevent unnecessary delays and complications during the transaction.<\/p>\n\n\n\n<p>Since drafting a purchase agreement can be a legal minefield, it is advised to seek professional help. Houzeo&#8217;s Gold Plan bridges this gap and gets you dedicated assistance with all paperwork from a licensed broker.<\/p>\n\n\n\t<div style=\"display: block ;\" qa-testing=\"testing\" class=\"home-page-quick-listing-wrapper  content-ql-new-ui \" main-title=\"List with our Gold Plan and get professional support \ud83e\udd47\" list-title=\"\" list-item-1=\"Upfront pricing - No hidden fees\" list-item-2=\"100% online - fast listing, faster changes\" list-item-3=\"Rated 4.9 stars on Google Reviews &amp; Trustpilot\" ql-button=\"\" minimize=\"true\" sidebar=\"\" contact-title=\"\" contact-content=\"\" siteurl_qlb=\"https:\/\/www.houzeo.com\" cash-ql=\"false\"><\/div>\n\t<script>\t\t\n\n\t\tdocument.addEventListener(\"DOMContentLoaded\", function () {\n\t\t\tconst isMobile = window.screen.width <= 768;\n\n\t\t\t\/\/ Global flags to prevent multiple loads\n\t\t\twindow.quickListingCssLoaded = window.quickListingCssLoaded || false;\n\t\t\twindow.quickListingJsLoaded = window.quickListingJsLoaded || false;\n\n\t\t\tconst cssURL = 'https:\/\/www.houzeo.com\/css\/quick-listing-block-v3.css?v=9.8';\n\t\t\tconst jsURL  = 'https:\/\/www.houzeo.com\/js\/quick-listing-block-v3.js?v=9.8';\n\n\t\t\t\/\/ \u2705 Load CSS immediately on mobile only\n\t\t\tif (isMobile && !window.quickListingCssLoaded) {\n\t\t\t\twindow.quickListingCssLoaded = true;\n\t\t\t\tloadCSS(cssURL);\n\t\t\t}\n\n\t\t\t\/\/ \u2705 Define JS loader (and CSS for desktop)\n\t\t\twindow.quickListingJsLoadfn = function () {\n\t\t\t\tif (!window.quickListingJsLoaded) {\n\t\t\t\t\twindow.quickListingJsLoaded = true;\n\n\t\t\t\t\t\/\/ On desktop: load CSS here (lazy), since it wasn't loaded initially\n\t\t\t\t\tif (!isMobile && !window.quickListingCssLoaded) {\n\t\t\t\t\t\twindow.quickListingCssLoaded = true;\n\t\t\t\t\t\tloadCSS(cssURL);\n\t\t\t\t\t}\n\n\t\t\t\t\tloadScript(jsURL);\n\n\t\t\t\t\t\/\/ Remove listener after load\n\t\t\t\t\tdocument.removeEventListener(isMobile ? 'touchstart' : 'mousemove', window.quickListingJsLoadfn);\n\t\t\t\t}\n\t\t\t};\n\n\t\t\t\/\/ \u2705 Add the correct event listener\n\t\t\tconst quickListingEvents = isMobile ? ['touchstart'] : ['mousemove', 'scroll'];\n\n\t\t\tquickListingEvents.forEach((eventName) => {\n\t\t\t\tdocument.addEventListener(eventName, window.quickListingJsLoadfn, {\n\t\t\t\t\tpassive: true,\n\t\t\t\t\tonce: true,\n\t\t\t\t});\n\t\t\t});\n\t\t\t\n\n\t\t\t\/\/ \u2705 Helpers\n\t\t\tfunction loadCSS(href) {\n\t\t\t\tconst link = document.createElement('link');\n\t\t\t\tlink.rel = 'stylesheet';\n\t\t\t\tlink.href = href;\n\t\t\t\tdocument.head.appendChild(link);\n\t\t\t}\n\n\t\t\tfunction loadScript(src) {\n\t\t\t\tconst script = document.createElement('script');\n\t\t\t\tscript.src = src;\n\t\t\t\tscript.async = true;\n\t\t\t\tdocument.head.appendChild(script);\n\t\t\t}\n\t\t});\n\t<\/script>\n\t\n\n\n\n<h2 class=\"wp-block-heading margin-top-28\" id=\"what-is-a-purchase-contract\"><strong>What Is a Purchase Agreement in Real Estate?<\/strong><\/h2>\n\n\n\n<p>A purchase agreement is a legally binding contract between a home buyer and seller that outlines the terms and conditions of a real estate transaction. Once both parties sign the agreement, the property is typically considered <a   href=\"https:\/\/www.houzeo.com\/blog\/what-does-under-contract-mean\/\" target=\"_blank\" rel=\"noreferrer noopener\">under contract<\/a>, meaning the buyer and seller have agreed to move forward with the sale under the contract&#8217;s terms.<\/p>\n\n\n\n<p>The agreement includes important details such as the purchase price, financing method, earnest money deposit, contingencies, closing date, and the responsibilities of both parties. It also explains what must happen before the sale can close and ownership can transfer to the buyer.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What Are the Types of Purchase Agreements?<\/strong><\/h2>\n\n\n\n<p>There are 4 types of purchase agreements: cash, mortgage, installment, and lease. The right one depends on how the buyer plans to purchase the property and the terms both parties agree to. <\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Cash Purchase Agreement:<\/strong> This is used when the buyer pays the full purchase price without a mortgage. These transactions often close faster because they do not require lender approval.<\/li>\n\n\n\n<li><strong>Mortgage Purchase Agreement:<\/strong> Buyers use this purchase agreement when they finance the home with a loan. It usually includes a financing contingency that allows the buyer to cancel the contract if they cannot secure a mortgage within the agreed time.<\/li>\n\n\n\n<li><strong>Installment Purchase Agreement:<\/strong> This allows the buyer to pay the purchase price over time instead of making one full payment at closing. The seller may keep legal ownership until all payments are completed. <\/li>\n\n\n\n<li><strong>Lease Purchase Agreement:<\/strong> This agreement combines a rental agreement with a future home purchase. The buyer rents the property for a set period and agrees to buy it before the lease expires. <\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What Is Included in a Real Estate Purchase Agreement?<\/strong><\/h2>\n\n\n\n<p>A real estate purchase agreement includes all the terms that both the buyer and seller must follow to complete the sale. While the exact format varies by state, most agreements contain the same key details like: <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>1. Buyer, Seller, and Property Information<\/strong><\/h3>\n\n\n\n<p>This section identifies the buyer and seller and provides the legal details of the property being sold. It typically includes the parties&#8217; names, the property&#8217;s address, and its legal description to ensure there is no confusion about the home covered by the agreement.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>2. Purchase Price and Financing Terms<\/strong><\/h3>\n\n\n\n<p>This clause states the agreed purchase price and explains how the buyer will pay for the property. It specifies whether the purchase will be made with cash, a mortgage, or another financing method. If a home loan is involved, the agreement may also include financing deadlines or loan-related requirements.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>3. Earnest Money Deposit<\/strong><\/h3>\n\n\n\n<p>The earnest money deposit is a good-faith payment the buyer makes after the offer is accepted. It shows the buyer is committed to purchasing the property.<\/p>\n\n\n\n<p>The agreement explains how much the deposit is, where it will be held, and what happens to the money if the transaction closes or either party cancels the contract under its terms.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>4. Closing Date and Possession<\/strong><\/h3>\n\n\n\n<p>This section sets the expected closing date, i.e., when the buyer and seller will complete the transaction. It also states when the buyer can take possession of the property, which may be on the closing day or another agreed date.<\/p>\n\n\n\n<p>If either party cannot close by the agreed date, the agreement also outlines whether the deadline can be extended and the steps that follow.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>5. Contingencies<\/strong><\/h3>\n\n\n\n<p><a   href=\"#contingencies-in-purchase-contract\">Contingencies<\/a> are conditions that must be met before the sale can move forward. They protect the buyer, the seller, or both parties if certain requirements are not satisfied.<\/p>\n\n\n\n<p>Common contingencies include financing approval, a satisfactory home inspection, a property appraisal, clear title, or the buyer selling their current home. If a contingency is not met within the agreed timeframe, the agreement may allow one or both parties to cancel the transaction.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>6. Title and Closing Details<\/strong><\/h3>\n\n\n\n<p>This section explains how ownership of the property will be transferred to the buyer. It covers title requirements, who will handle the closing process, and which documents must be completed before the sale is finalized.<\/p>\n\n\n\n<p>The agreement may also specify how closing costs, taxes, recording fees, and other transaction expenses will be divided between the buyer and seller.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What Is Not Covered in the Purchase Contract?<\/strong><\/h2>\n\n\n\n<p>A purchase agreement outlines the terms of the sale, but it does not cover every detail related to the property or the transaction.<\/p>\n\n\n\n<p>For example, it usually does not include future repair agreements made after signing, homeowners association rules, home warranties purchased separately, or the buyer&#8217;s mortgage approval documents. These are typically addressed through separate contracts or disclosures.<\/p>\n\n\n\n<p>Any terms that the buyer and seller want to enforce should be included in the purchase agreement or added through a written amendment. Verbal promises are generally difficult to enforce if they are not part of the signed contract.<\/p>\n\n\n\n<h2 class=\"wp-block-heading margin-top-28\" id=\"things-to-check-purchase-agreement-for-real-estate\"><strong>What Should You Check in a Purchase and Sale Agreement?<\/strong><\/h2>\n\n\n\n<p>Here\u2019s a list of clauses in a contract of purchase and sale you should be aware of:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Topic<\/strong><\/td><td><strong>Description<\/strong><\/td><\/tr><tr><td><strong>Parties Involved<\/strong><\/td><td>Names and contact information of all buyers and sellers.<\/td><\/tr><tr><td><strong>Property Details<\/strong><\/td><td>Property\u2019s address, measurements of the property, and buyer and seller\u2019s agreed-upon home purchase price.<\/td><\/tr><tr><td><strong>Representations and Warranties<\/strong><\/td><td>The facts and conditions of the property as given by the seller.&nbsp;<\/td><\/tr><tr><td><strong>Financing and Taxes<\/strong><\/td><td>Details of any mortgage loan taken by the buyer and the payment method. Also, the liability of property taxes is mentioned.<\/td><\/tr><tr><td><strong>Title Insurance<\/strong><\/td><td>A note about whether the buyer or lender is purchasing insurance against bad title in the future.<\/td><\/tr><tr><td><strong>Closing and Possession Date<\/strong><\/td><td>The date of transfer of title and the date when the buyer will receive the keys to the property.<\/td><\/tr><tr><td><strong>Contingencies<\/strong><\/td><td>Conditions such as home inspection, <a   href=\"https:\/\/www.houzeo.com\/blog\/home-appraisal-process\/\" target=\"_blank\" rel=\"noreferrer noopener\">appraisal<\/a>, or mortgage approval have to be met by a certain date. Otherwise, the sale of the property can\u2019t go through.<\/td><\/tr><tr><td><strong>Earnest Money<\/strong><\/td><td><a   href=\"https:\/\/www.houzeo.com\/blog\/earnest-money\/\" target=\"_blank\" rel=\"noreferrer noopener\">Earnest money<\/a> deposits act as a security deposit. It\u2019s paid by the buyer before a home purchase and must be mentioned in the agreement.<\/td><\/tr><tr><td><strong>Closing Costs<\/strong><\/td><td>The required closing costs and the person who is responsible for paying them. The amount of the costs is not mentioned.<\/td><\/tr><tr><td><strong>Conflict Resolution<\/strong><\/td><td>Options to resolve a conflict and terminate the contract.<\/td><\/tr><tr><td><strong>Signatures<\/strong><\/td><td>Required of each party to finalize every purchase agreement.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading margin-top-28\" id=\"contingencies-in-purchase-contract\"><strong>What Are the Contingencies in a Contract to Purchase?<\/strong><\/h2>\n\n\n\n<p>Here are some common contingencies that one may see when buying or selling a house:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Inspection Contingency<\/strong>: Home sellers must get a home inspection done beforehand. This is because the buyer can cancel the contract if the seller doesn&#8217;t conduct one. Buyers are also allowed to nullify it if any defects are found on the property after inspection.<\/li>\n\n\n\n<li><strong>Appraisal Contingency<\/strong>: It ensures that a home\u2019s <a   href=\"https:\/\/www.houzeo.com\/blog\/appraised-value-vs-market-value\/\" target=\"_blank\" rel=\"noreferrer noopener\">appraised value<\/a> is at least equal to or higher than the purchase price.<\/li>\n\n\n\n<li><strong>Mortgage Contingency:<\/strong> Sellers can cancel the sale if a buyer can\u2019t obtain a mortgage. This will result in buyers getting their earnest money deposit back.<\/li>\n\n\n\n<li><strong>Title Contingency<\/strong>: A clean title report saves the buyer from a future dispute over a bad title. It assures the buyer that the property has no <a   href=\"https:\/\/www.houzeo.com\/blog\/what-is-a-lien\/\" target=\"_blank\" rel=\"noreferrer noopener\">liens<\/a>.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading margin-top-28\" id=\"purchase-and-sales-agreement\"><strong>How Binding Is a Real Estate Purchase Contract?<\/strong><\/h2>\n\n\n\n<p>A real estate purchase agreement legally binds all parties involved in a property transaction. Once signed, it shows their intent to transfer the house from the seller to the buyer. But they must meet all contingencies before the contract is enforced. <\/p>\n\n\n\n<p>It protects both the buyer and seller and helps avoid issues that could halt the transaction. Consult with a professional agent or <a   href=\"https:\/\/www.houzeo.com\/flat-fee-mls\" target=\"_blank\" rel=\"noreferrer noopener\">list with a flat fee MLS company<\/a> to delegate heavy documentation. <\/p>\n\n\n\n<p>Choose a reliable real estate agent to check for and fix property-related issues to ensure a smooth transfer of ownership. With Houzeo&#8217;s network of real estate professionals, it has never been easier to find one.<\/p>\n\n\n\t<div  class=\"hfsWidget \" data-widget-title=\"Find top real estate agents near me\" data-widget-list-item1=\"1st item\" data-widget-list-item2=\"2nd item\" data-widget-list-item3=\"3rd item\" data-widget-type=\"vendor\" data-widget-vendor-type=\"real_estate_agent\" data-widget-state=\"US\" data-widget-city=\"\" data-widget-redirect-url=\"https:\/\/www.houzeo.com\/pros\/real-estate-agents-near-me\" data-widget-redirect-text=\"Search a Real Estate Agent Near Me\" data-widget-button-url=\"https:\/\/www.houzeo.com\/pros\/real-estate-agents-near-me\" data-widget-button-text=\"Find a Real Estate Agent\" data-widget-min-price=\"0\" data-widget-max-price=\"0\" data-widget-min-area=\"0\" data-widget-max-area=\"0\" data-widget-sidebar=\"false\">\n       \n    <\/div>\n\t<script>\n    document.addEventListener(\"DOMContentLoaded\", function() {        \n        if (!window.assetsLoaded) {\n            window.assetsLoaded = true;\n            var version = (typeof customData !== 'undefined' && customData.customVersion) ? customData.customVersion : '1.0';\n            loadScript('\/blog\/wp-content\/themes\/houzeo-new-design\/js\/hfs-widget.js?version=' + version);\n            loadCSS('\/blog\/wp-content\/themes\/houzeo-new-design\/css\/hfs-widget.css?version=' + version);\n        }    \n    });\n\t\t\n\t<\/script>\n\t\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<div class=\"new-excerpt\"><p class=\"small-desc\">Purchase agreement shows intent of parties to transfer a property. It's generally signed at closing and is the actual contract to purchase\/sell a...<\/p><\/div><div class=\"reading_date\"><span class=\"readtime\">8 mins read<\/span><span class=\"date\">Mar 31, 2026<\/span><\/div>","protected":false},"author":218,"featured_media":549042,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46226],"tags":[51741,51746,51744,51742,51745,51743],"class_list":["post-548937","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-seller","tag-agreement-of-purchase","tag-agreement-of-purchase-and-sale","tag-purchase-agreement-contracts","tag-purchase-contracts-for-real-estate","tag-purchase-sales-agreement","tag-what-is-a-purchase-contract"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Selling or Buying a Home? Read the Purchase Agreement First!<\/title>\n<meta name=\"description\" content=\"A real estate purchase agreement legally binds buyers and sellers and specifies what clauses need to be satisfied in the transaction.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.houzeo.com\/blog\/purchase-agreement\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Selling or Buying a Home? 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