Real estate purchase contract template
A residential purchase agreement is the legally binding contract that spells out the price, terms, and conditions when someone buys or sells a home. Use the free template below to download a ready-to-edit version, and keep reading for a plain-English breakdown of each clause, how the contract differs from state to state, and answers to the most common questions buyers and sellers ask.
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What is a residential purchase agreement?
A residential purchase agreement is a written contract between a buyer and a seller that sets the terms for transferring ownership of a home. It identifies the property and the parties, fixes the purchase price, and lays out the deposit, financing terms, inspection rights, and closing date. Once both sides sign, it becomes a binding agreement that governs the entire transaction through closing. Because buying a home is usually the largest purchase a person makes, this document protects both parties by putting every important term in writing rather than leaving it to memory or verbal promises.
When you’d use one
- You are buying or selling a single-family home, condo, or townhouse directly or through an agent.
- You’ve accepted an offer and need to put the agreed terms into a formal, signed contract.
- You are purchasing a home without an agent (for sale by owner) and need a complete contract.
- You want to protect a deposit with clear refund conditions if the deal falls through.
- You need contingencies in place for financing, inspection, or the sale of your current home.
- You’re documenting a private sale between family members or acquaintances and want it done properly.
Key clauses explained
Parties & property
Names the buyer and seller and describes the exact property being sold, usually with the address and legal description. This matters because it removes any doubt about who is bound and precisely what is being transferred.
Purchase price & earnest money
States the total price and the earnest money deposit the buyer puts down to show good faith. It matters because it confirms the financial terms and the amount at risk if the buyer backs out without cause.
Financing contingency
Makes the purchase conditional on the buyer securing a mortgage by a set date. It matters because it lets the buyer walk away and recover the deposit if a loan can’t be obtained.
Inspection contingency
Gives the buyer the right to inspect the home and request repairs, a credit, or cancellation based on the findings. It matters because it protects the buyer from inheriting hidden defects.
Appraisal contingency
Conditions the sale on the home appraising at or above the purchase price. It matters because lenders won’t finance more than the appraised value, so it shields the buyer from overpaying.
Title & survey
Requires the seller to deliver clear, marketable title and may call for a survey of the property’s boundaries. It matters because it ensures the buyer receives ownership free of undisclosed liens or boundary disputes.
Closing date
Sets the date when ownership and funds change hands. It matters because it gives both parties a clear deadline to complete their obligations.
Possession
States when the buyer actually takes physical possession of the home, often at closing but sometimes later. It matters because it prevents disputes over move-in timing and any rent-back arrangements.
Risk of loss
States who bears the risk if the property is damaged or destroyed between signing and closing — typically the seller until closing or possession passes, unless the contract or your state’s law (such as the Uniform Vendor and Purchaser Risk Act) shifts it to the buyer. It matters because it decides who is responsible if a fire, storm, flood, or other casualty hits the home before the sale closes, and whether the buyer can cancel or must still complete the purchase.
Contingency for sale of buyer’s home
Makes the purchase conditional on the buyer first selling their current home. It matters because it protects a buyer from being obligated to carry two mortgages at once.
Default & remedies
Spells out what happens if either party fails to perform, such as forfeiting the deposit or pursuing specific performance. It matters because it defines the consequences and discourages either side from walking away without cause.
Disclosures incorporated
Confirms that required seller disclosures (such as known defects or lead-based paint) are part of the agreement. It matters because it ties the seller’s representations to the contract and supports the buyer’s remedies if something was concealed.
Contingencies explained
Contingencies are conditions that must be met before the sale becomes final, and three of them do most of the work of protecting a buyer. A financing contingency lets the buyer cancel and recover their deposit if they can’t get approved for a mortgage, so they aren’t trapped in a deal they can’t fund. An inspection contingency gives the buyer a window to have the home professionally examined and to renegotiate or walk away if serious problems surface. An appraisal contingency protects the buyer if the home appraises for less than the agreed price, since most lenders will only finance up to the appraised value. Together, these clauses give a buyer realistic exits without losing their deposit.
Earnest money
Earnest money is a good-faith deposit the buyer puts down after an offer is accepted to show they are serious about the purchase. It is typically held in escrow by a neutral third party, such as a title company, escrow company, or attorney’s trust account, rather than going straight to the seller. The amount commonly ranges from about 1% to 3% of the purchase price, though it varies by market. If the buyer cancels for a reason allowed by a contingency, such as failed financing or a bad inspection, the deposit is usually refundable. If the buyer simply walks away without a valid contractual reason, the seller may be entitled to keep it.
State-by-state differences
Real estate closing customs vary across the country. Some states are “attorney states,” where a licensed real estate attorney typically handles the closing, while others rely on title or escrow companies. Many states also use standard, association-approved or promulgated contract forms. The table below summarizes common practices in twelve states. Always confirm current local custom, because practices can differ even within a single state.
| State | Attorney state or escrow/title state | Notable specifics |
|---|---|---|
| Arizona | Escrow/title state | Closings are typically handled by escrow and title companies. Standardized association forms are widely used. |
| California | Escrow/title state | Escrow companies commonly manage closing. Widely used association forms; sellers must provide statutory disclosures. |
| Delaware | Attorney state | An attorney is commonly involved in closing. Confirm local practice for your county. |
| Florida | Escrow/title state | Title companies typically handle closing, though attorneys are sometimes used. Standardized forms are common. |
| Georgia | Attorney state | An attorney commonly conducts the closing. Confirm whether an attorney is required for your transaction. |
| Illinois | Varies | Attorney involvement is common, especially in the Chicago area, alongside title companies. Confirm local custom. |
| Michigan | Escrow/title state | Title companies commonly handle closing. Confirm local practice in your area. |
| New York | Attorney state | Attorneys typically handle both sides of the transaction and the closing, particularly downstate. |
| North Carolina | Attorney state | A licensed attorney commonly oversees closing. Confirm local requirements. |
| Ohio | Escrow/title state | Title companies commonly handle closing, though attorney involvement varies by region. |
| Pennsylvania | Escrow/title state | Title companies commonly handle closing; attorney use varies. Confirm local custom. |
| Texas | Escrow/title state | Title companies commonly handle closing. Most residential deals use TREC promulgated contract forms. |
Where you are unsure, confirm whether an attorney or a title/escrow company handles closing in your area before signing.
Common mistakes
- Waiving or skipping the inspection contingency just to make an offer more competitive, then discovering costly defects too late.
- Leaving the closing date vague or open-ended instead of setting a specific deadline both parties can plan around.
- Failing to specify what stays with the home, such as appliances, fixtures, or window treatments, which leads to disputes at move-in.
- Writing a weak financing contingency that doesn’t clearly state the loan terms and deadline needed to protect the deposit.
- Forgetting to attach or reference required disclosures, leaving gaps in the seller’s representations.
How to fill it out
- Enter the full legal names of the buyer and seller and the complete property address and legal description.
- Fill in the purchase price, the earnest money amount, and who will hold the deposit in escrow.
- Select and complete the contingencies you need, such as financing, inspection, appraisal, and sale of your current home, with clear deadlines.
- Set the closing date, the possession date, and list any items that stay with or leave the property.
- Review the disclosures and default terms, then have both parties sign and date the agreement and keep a copy.
Frequently asked questions
Is a purchase agreement binding once signed?
Yes. Once both the buyer and seller sign, it becomes a legally binding contract. Either party can typically exit only through a contingency or another exit clause written into the agreement.
Can I back out after signing?
You can usually back out without penalty if a contingency allows it, such as a failed inspection, denied financing, or a low appraisal. Backing out without a valid contractual reason can mean losing your earnest money or facing other remedies.
What is earnest money?
Earnest money is a good-faith deposit the buyer makes after an offer is accepted, usually held in escrow. It is generally refundable if the buyer cancels under a contingency and at risk if the buyer walks away without cause.
Do I need an attorney?
It depends on your state and the deal. Some states are “attorney states” where a real estate attorney typically handles closing, while others rely on title or escrow companies. Even where not required, an attorney can be worth it for complex or high-value transactions.
What are contingencies?
Contingencies are conditions that must be satisfied before the sale becomes final, such as obtaining financing, passing inspection, or meeting the appraised value. They give the buyer defined ways to exit and recover the deposit if a condition isn’t met.
What happens at closing?
At closing, the buyer signs the loan and transfer documents, funds are exchanged, and the deed is delivered and recorded to transfer ownership. The closing is typically coordinated by a title company, escrow company, or attorney depending on your state.
Download the free template
Download the free Residential Purchase Agreement template below in your preferred format and edit it to fit your transaction. Available as a print-ready PDF and an editable Word document:
Disclaimer
This template and the information on this page are for general informational purposes only and are not legal advice. Laws vary by state. Consult a licensed attorney for your situation.