Purchase Agreement
The signed contract between buyer and seller that defines the terms of a real estate sale.
The purchase agreement (also called a purchase contract or sales contract) is the foundational legal document of any home sale. It specifies the price, the closing date, what's included in the sale, the earnest money amount, and the contingencies that protect each party.
Common contingencies include financing (the buyer's offer is contingent on getting their mortgage approved), inspection (subject to a satisfactory home inspection), appraisal (the home must appraise for at least the contract price), and sometimes the sale of the buyer's current home.
Every term in a purchase agreement matters and is negotiable. Lenders will need a fully executed copy with all signatures and any addenda to underwrite the loan. Buyers should read the contract carefully and have questions answered before signing.
Related terms
Other terms you'll see alongside Purchase Agreement
A good-faith cash deposit a buyer puts down when offering on a home, typically held in escrow until closing.
A licensed real estate agent who represents the buyer's interests in a home purchase transaction.
A licensed real estate agent who represents the homeowner selling a property, also called a listing agent.
An independent valuation of a property by a licensed appraiser, used to confirm that the home is worth what the buyer agreed to pay.
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