A real estate purchase agreement is the contract in which a buyer agrees to buy a property and a seller agrees to sell it, at a stated price and on stated terms. It is also called a purchase contract, a sales contract, an offer to purchase, or a contract to buy and sell. Once both sides sign it, it binds them, subject to the conditions written into it, such as financing, inspection and appraisal.
This guide explains what a purchase agreement contains and how it moves from offer to closing. It is general information, not legal advice, and the rules differ by state.
Which form do you use? It depends on the state
There is no national purchase agreement. Each state, and sometimes each region, uses its own:
- State-promulgated forms. In some states the real estate commission writes the contract and licensees must use it. Colorado is one: brokers use the Commission's CBS1 for residential sales (see the Colorado contract guide). Texas licensees generally use forms promulgated by the Texas Real Estate Commission.
- Realtor association forms. In many states agents use forms written by the state or local Realtor association, such as the California Association of Realtors purchase agreement.
- Attorney-drafted contracts. In some states and regions, attorneys draft or review the contract as a matter of custom.
If you are an agent, use the form your state and brokerage require. If you are buying or selling on your own, a local real estate attorney can tell you which form is standard where the property is.
What a real estate purchase agreement contains
| Section | What it says |
|---|---|
| Parties and property | Who is buying and selling, the address and legal description, and what is included (appliances, fixtures) or excluded |
| Price and earnest money | The purchase price, the earnest money deposit, who holds it, and when it is due |
| Financing | Cash or loan, the loan type and amount, and the deadline for loan approval |
| Appraisal | What happens if the appraisal comes in below the price |
| Inspection and due diligence | The buyer's right to inspect, the deadline to object, and how repairs are negotiated |
| Title | The title insurance commitment, the deadline to object to title problems, and the type of deed |
| Disclosures | The seller's property disclosure, lead-based paint disclosure for homes built before 1978, and HOA documents |
| Closing and possession | The closing date, who pays which costs, prorations, and when the buyer gets the keys |
| Default and termination | What happens to earnest money if one side backs out or misses a deadline |
| Additional terms | Anything negotiated that the printed form does not cover |
From offer to closing
- Offer. The buyer's agent fills in the form with the price, terms and deadlines, and the buyer signs.
- Counter. The seller accepts, rejects or counters. Counters go back and forth until both sides agree or walk away.
- Acceptance. When both sides have signed the same terms, the contract is binding. The date of mutual acceptance usually starts the clock on the deadlines.
- Contingency period. Earnest money, inspection, appraisal, loan and title deadlines come due. Each can lead to an objection, a renegotiation or a termination.
- Closing. The buyer signs the loan documents, funds are wired, the deed is recorded, and possession transfers.
Purchase agreement templates: a word of caution
A generic template found online may not meet your state's requirements, may leave out disclosures your state requires, and may not match the form the other side's agent expects. Agents in states with mandatory forms cannot use them at all. Use your state's standard form, filled in carefully, and ask an attorney about anything unusual.
Where Offers & Contracts fits
Offers & Contracts fills your state's purchase contract from the deal, computes every deadline the contract's way, and collects signatures on the client's phone. It fills only the form's blanks and never changes the printed text, and nothing goes out until the agent approves it. It is live in Colorado today; for other states, join the waitlist on the Offers & Contracts page and we will tell you when your state opens.