To make a purchase agreement for a house, start with a standardized form from your state’s real estate association or an attorney-drafted template, fill in the parties, legal property description, price, earnest money, closing date, contingencies, and required disclosures, then negotiate any changes in writing before both sides sign. Every state requires real estate contracts to be in writing under the Statute of Frauds, so an oral deal for a house carries no legal weight in court no matter how specific the conversation was. The written document has to contain enough detail to show what both sides intended: who is buying, who is selling, which property is involved, how much is being paid, and when the deal closes. If any of those core terms are missing or too vague, a court can declare the contract unenforceable even though both parties signed it.
Start With the Right Form
Most residential purchase agreements begin with a standardized form provided by a local real estate association or a state-approved contract template. An agent fills in the blanks: price, earnest money amount, contingency deadlines, closing date, and any special terms. These forms are designed to cover the most common scenarios, and for a straightforward sale they work well.
Where the deal gets complicated, whether because of unusual financing, title issues, a seller rent-back, or multiple parcels, a real estate attorney should either draft a custom agreement or review the standard form before you sign. Agents can walk you through what each clause means, but they cannot give legal advice. The REALTOR Code of Ethics specifically requires agents to direct clients to an attorney for legal questions, and agents who cross that line risk fines, license revocation, and lawsuits.1National Association of REALTORS. What Constitutes the Unauthorized Practice of Law Some states require attorney involvement in every real estate closing; others leave it optional. Either way, legal review before you commit is one of the cheaper forms of insurance in a six-figure transaction.
Terms the Agreement Must Contain
A purchase agreement covers far more than the price. Each section allocates risk, sets deadlines, and determines who is responsible for what between signing and closing. Missing or vague terms are the single biggest source of post-signing disputes, so precision matters everywhere.
Parties and Property Description
Identify the buyer and seller by their full legal names, and include a legal description of the property. The street address alone is not enough. The legal description, which you can pull from the deed recorded in county records, identifies the exact boundaries of the parcel. For a condo, the description also includes the unit number and any assigned parking or storage spaces.
Purchase Price and Earnest Money
State the total purchase price, how the buyer plans to pay (cash, conventional mortgage, FHA loan, and so on), and the amount of the earnest money deposit. Earnest money typically runs 1% to 3% of the purchase price, though competitive markets sometimes push that higher. The deposit signals the buyer’s commitment and is held in an escrow account by a neutral third party, usually the title company or closing attorney. At closing, the earnest money is credited toward the down payment or closing costs.
Closing Date, Possession, and Prorations
Set a target closing date and specify when the buyer takes possession. Possession usually transfers at closing, but some deals include a seller rent-back period if the seller needs extra time to move out. Property taxes, homeowners association dues, and similar recurring costs get prorated between buyer and seller based on the closing date. The seller pays for the portion of the year they owned the property, and the buyer picks up from there. How the proration is calculated (based on the prior year’s tax bill, the current year’s assessment, or some other method) varies by local custom, so the agreement should spell out the approach.
Spell Out What Stays and What Goes
Few things derail a closing faster than a disagreement over whether the refrigerator, curtain rods, or backyard swing set stays with the house. The general rule is that fixtures, meaning items permanently attached to the property, convey to the buyer. Items you can unplug and carry out the door are personal property and go with the seller. The trouble is that “permanently attached” is not always obvious. A ceiling fan bolted to the ceiling is a fixture. A freestanding bookshelf is personal property. A wall-mounted TV bracket or a custom-built shelving unit sits somewhere in between.
Courts look at factors like how the item was attached, whether it was adapted specifically for the property, and what the owner intended when installing it. The way to avoid a fight is to list every disputed item in the agreement itself. If the seller wants to take the dining room chandelier, write it in. If the buyer expects the washer and dryer to stay, write that in too.
As-Is Clauses
Some sellers insist on selling the property “as-is,” meaning the buyer accepts the home in its current condition and the seller will not make repairs. An as-is clause shifts the risk of undiscovered defects to the buyer. It does not give the seller a free pass to hide problems. A seller who actively conceals a known defect, lies about the property’s condition, or prevents an inspection can still face liability even with an as-is clause in the contract. Courts weigh whether the clause was genuinely negotiated or just boilerplate, and whether the buyer had a fair opportunity to inspect before agreeing to it.
Build In Contingencies
Contingencies are conditions that must be satisfied before the sale can close. If a contingency is not met within its deadline, the buyer can usually walk away and get the earnest money back. Waiving contingencies to make an offer more competitive is common in hot markets, and it carries real financial risk.
Financing Contingency
A financing contingency makes the sale conditional on the buyer securing a mortgage on acceptable terms by a specified date. If the lender denies the loan or cannot close in time, the buyer can cancel the contract without forfeiting the deposit. This is the clause that protects you if your credit situation changes, underwriting requirements shift, or interest rates move enough to make the loan unaffordable.
Appraisal Contingency
Lenders will not lend more than a property is worth, so most financed purchases include an appraisal contingency. If the appraiser values the home below the purchase price, the buyer can renegotiate, cover the gap out of pocket, or back out. Without this contingency, a low appraisal leaves the buyer stuck making up the difference or breaching the contract.
Inspection Contingency
An inspection contingency gives the buyer a set number of days, often 7 to 14, to hire a professional inspector and review the results. If the inspection turns up major problems, the buyer can request repairs, negotiate a price reduction, or terminate the agreement. This is where most renegotiation happens. A cracked foundation or failing HVAC system discovered during inspection changes the economics of the deal, and a well-written inspection contingency preserves the buyer’s leverage to address it.
Title Contingency
A title contingency protects the buyer if a title search reveals outstanding liens, boundary disputes, or competing ownership claims. The seller typically orders a title commitment from a title insurance company, and the buyer gets a defined review period to object to anything that shows up. If the seller cannot clear the defect, the buyer can walk away. Owner’s title insurance, which protects against claims that surface after closing, is a related but separate protection. The Consumer Financial Protection Bureau explains that title insurance covers the homeowner if someone later sues claiming an interest in the property from before the purchase, such as unpaid contractor liens or prior-owner tax debts.2Consumer Financial Protection Bureau. What Is Owner’s Title Insurance?
Include the Required Disclosures
Beyond whatever your state requires, federal law imposes its own disclosure obligation for homes built before 1978. Sellers of these older homes must disclose any known lead-based paint hazards, provide the buyer with an EPA-approved lead hazard information pamphlet, and give the buyer at least 10 days to arrange a lead inspection before the contract becomes binding. The purchase agreement itself must include a Lead Warning Statement, and the buyer must sign an acknowledgment confirming they received the pamphlet and had the opportunity to inspect.3Office of the Law Revision Counsel. 42 USC 4852d – Disclosure of Information Concerning Lead Upon Transfer of Residential Property These requirements are implemented through federal regulations and apply in every state.4eCFR. 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
Most states also require sellers to complete a property condition disclosure form covering structural defects, water damage, pest infestations, and environmental hazards. The specific requirements vary significantly, so the purchase agreement should reference these disclosures and set a deadline for the seller to deliver them.
Put Default Remedies in Writing
Every purchase agreement should address what happens if one side does not follow through. This is the section most buyers skim and most sellers later wish they had read more carefully.
Buyer Default
If the buyer backs out without a valid contingency reason, the seller’s most common remedy is keeping the earnest money as liquidated damages. Many contracts specifically state that the deposit is the seller’s sole remedy, which caps the recovery but also avoids a drawn-out lawsuit. Without that limitation, a defaulting buyer could be on the hook for additional costs the seller incurred because of the breach, including carrying costs, relisting expenses, and attorney fees.
Seller Default
When a seller refuses to close, the buyer has two broad options. One is suing for money damages covering out-of-pocket costs and any difference between the contract price and what the buyer now has to pay for a comparable home. The other is asking a court to order “specific performance,” which forces the seller to go through with the sale. Courts are more willing to grant specific performance in real estate cases than in most other contract disputes, because every piece of property is unique and no amount of money perfectly replaces the specific home a buyer contracted to buy.5Legal Information Institute. Specific Performance Buyers pursuing this remedy often record a notice against the property’s title, which effectively prevents the seller from selling to someone else while the lawsuit is pending.
Earnest Money Disputes
When both sides claim the earnest money after a failed deal, the escrow agent is stuck in the middle. Escrow agents will not release funds unless both parties agree or a court orders it. If the buyer and seller cannot resolve the dispute themselves, the escrow agent may file an interpleader action, a lawsuit asking the court to decide who gets the money. The agent deposits the funds with the court and asks to be released from the case while the buyer and seller fight it out. The escrow agent’s legal fees for that process typically come out of the deposit itself.
Negotiate, Amend, and Sign in Writing
The initial purchase agreement is rarely the final version. A seller may counter with a higher price, a shorter inspection period, or fewer concessions on closing costs. This back-and-forth produces counteroffers, each of which should be documented in writing as an amendment or addendum to the original agreement. Verbal side deals are unenforceable for the same reason the original agreement must be written: the Statute of Frauds applies to every modification of a real estate contract, not just the first draft.
Once both sides agree on all terms, everyone signs the final version. At that point the agreement is “fully executed” and legally binding. Signed copies go to both parties, their agents, their attorneys, and the escrow or title company handling the closing. The earnest money deposit, if not already submitted, is due immediately.
After Signing: Deadlines That Matter
The period between a fully executed agreement and the closing date is when most of the real work happens. The buyer orders inspections, the lender processes the mortgage application, the title company runs a title search, and the appraiser evaluates the property. Each step ties back to a contingency deadline in the agreement, so tracking those dates is critical. Missing a contingency deadline can mean losing the right to back out with your deposit intact.
A typical timeline runs 30 to 60 days, though cash deals can close much faster. During this window, the buyer’s lender will verify income, employment, credit, and debt-to-income ratio before issuing final loan approval. If the inspection turns up problems, the buyer and seller negotiate repairs or credits. If the title search reveals a lien, the seller must clear it before closing. All of this happens simultaneously, and delays in one area often push back the entire schedule.
The Three-Day Closing Disclosure Rule
If the buyer is financing the purchase, federal law requires the lender to deliver a Closing Disclosure form at least three business days before the closing date.6eCFR. 12 CFR 1026.19 – Certain Mortgage and Variable-Rate Transactions This document itemizes every cost: loan terms, monthly payment, closing costs, and cash needed at the table. The three-day window exists so you can compare the Closing Disclosure against the Loan Estimate you received earlier and catch any surprises before signing. If the lender mails the disclosure rather than delivering it in person, the law assumes you received it three business days after mailing, which effectively means the lender needs to send it six business days before closing. A borrower can waive this waiting period only in a genuine personal financial emergency, and only by providing a handwritten, signed statement describing the emergency.