What to Look for in a Real Estate Purchase Agreement

A real estate purchase agreement typically runs 10 to 40 pages depending on the state and deal complexity. Most of it is boilerplate. But buried in that boilerplate are the terms that determine whether your client makes money, loses money, or ends up in a legal dispute. Knowing where to look — and what to look for — is what separates a good agent from a great one.

This sounds basic, but errors here void contracts. Check that:

• All buyer and seller names match their legal names exactly (not nicknames, not maiden names)
• The property address matches the MLS listing and tax records
• The legal description (lot, block, subdivision) is accurate
• If there are multiple buyers or sellers (trusts, LLCs, married couples), all entities are named

One wrong digit in a lot number can mean the contract refers to a completely different property. It happens more often than you'd think, especially in subdivisions with similar addresses.

The purchase price is obvious. What's not obvious is how the financing section interacts with it. Look for:

• Down payment amount — Does it match what the buyer's lender expects?
• Loan type and amount — Conventional, FHA, VA, and USDA loans have different requirements that affect timelines and contingencies
• Seller concessions — Are they clearly stated with a dollar amount or percentage? Loan types cap seller concessions differently
• Cash vs. financed — A cash offer that later needs financing changes the entire deal structure

The earnest money section should answer five questions clearly:

1. 1How much is the deposit?
2. 2When is it due? (Specific calendar date, not "upon acceptance")
3. 3Who holds it? (Escrow company, title company, brokerage?)
4. 4Under what conditions is it refundable?
5. 5What happens if there's a dispute over the deposit?

If any of these are vague or missing, you have a problem waiting to happen. Earnest money disputes are one of the most common causes of post-contract litigation in residential real estate.

Contingencies are the escape hatches in a contract. They protect the buyer (and sometimes the seller) by allowing them to walk away under specific conditions. The most common contingencies are:

• Inspection contingency — How many days? What triggers the right to cancel? Can the buyer request repairs or just walk?
• Financing contingency — What happens if the loan falls through? Is there a specific lender named?
• Appraisal contingency — If the property appraises below the purchase price, who covers the gap?
• Sale contingency — Is the buyer's purchase contingent on selling their current home?
• HOA review contingency — Does the buyer have time to review HOA documents and financials?

For each contingency, check three things: the deadline, the notification requirement (does the buyer have to actively invoke it or does it expire automatically?), and the consequence of expiration.

The closing date seems straightforward, but watch for these issues:

• Is the closing date realistic given the financing timeline? FHA and VA loans often need 45–60 days
• Is possession at closing, or is there a post-closing occupancy agreement?
• If the seller needs to stay past closing, are the terms (rent, deposit, liability) spelled out?
• What happens if closing is delayed? Is there a per-diem penalty?

Post-closing occupancy disputes are increasingly common, especially in markets where sellers need time to find their next home. If your contract allows post-closing possession, treat it like a separate lease agreement — because legally, that's what it is.

This is where "I thought the refrigerator was included" disputes come from. The contract should explicitly state:

• Which appliances convey with the property
• Whether fixtures (light fixtures, window treatments, built-in shelving) are included
• Any personal property the seller is leaving or taking
• Outdoor items (storage sheds, play equipment, hot tubs)

If it's not in the contract, it's not included. Period. Don't rely on verbal agreements or "it was there during the showing." Get it in writing.

Every state requires different disclosures. At minimum, check for:

• Lead-based paint disclosure (required by federal law for homes built before 1978)
• Property condition disclosure (seller's knowledge of defects)
• HOA disclosure documents
• State-specific disclosures (flood zones, mold, sex offender registries, etc.)

Missing disclosures don't just create liability — in many states, they give the buyer a right to cancel the contract even after the inspection contingency has passed.

Addenda deserve the same scrutiny as the main contract. Each addendum should be signed by all parties, dated, and cross-referenced with the main agreement. If an addendum contradicts the main contract, the addendum usually controls — but don't assume this without checking your state's rules.

Nobody reads the default clause until there's a problem. By then it's too late. Before your client signs, understand:

• What constitutes a default by either party
• What remedies are available (specific performance, liquidated damages, mediation, arbitration)
• Whether attorney's fees are recoverable by the prevailing party
• Whether the contract requires mediation before litigation

In many standard contracts, the seller's sole remedy for buyer default is keeping the earnest money deposit. But custom contracts or commercial deals may include specific performance clauses that force the buyer to close. Know what your client is agreeing to.