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Real Estate Purchase Agreement Template Guide (Free Download + AI Generator)
Greg Mitchell | Legal consultant at AI Lawyer
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Part of our Real Estate Legal Templates series—covering contracts and tools that bring clarity, protection, and efficiency to property transactions—this guide explains how to turn a handshake into a binding deal with a Real Estate Purchase Agreement. A Real Estate Purchase Agreement is the contract that turns a handshake into a binding deal. It captures price, contingencies, timelines, disclosures, and closing mechanics—so buyers and sellers know exactly what must happen (and when) before title transfers.
In a market shaped by tighter lending standards and more robust disclosure rules, a clean, complete agreement is the difference between a smooth closing and a costly derailment.
Download the free Real Estate Purchase Agreement template or generate a tailored version with our AI tool—then have a local real estate attorney review it before signing.
Table of Contents
What Is a Real Estate Purchase Agreement?
Why This Agreement Matters in 2025
Key Components Every Purchase Agreement Should Include
Common Variations (Residential, Commercial, Land-Only)
Legal Requirements & Mandatory Disclosures
Negotiating Tips & Protecting Your Interests
Step-by-Step: How to Draft and Execute the Agreement
Risks of Skipping or Using a Faulty Agreement
Checklist: Real Estate Purchase Agreement Essentials
FAQs
1. What Is a Real Estate Purchase Agreement?
A Real Estate Purchase Agreement (sometimes called a sale and purchase contract) sets out the parties, property, price, contingencies, and closing terms for a property sale. It also defines remedies if either side breaches. Because real estate is unique and high-value, this is not a “standard” form—local law, property type, and deal dynamics all shape the final document.
In most jurisdictions, contracts for the sale of land must be in writing under the Statute of Frauds, which is why a signed agreement is legally indispensable.
2. Why Real Estate Purchase Agreement Matters in 2025
Transactions are moving fast, but regulatory guardrails are stronger than ever. Lenders require documentation that aligns with federal mortgage disclosure rules, and state laws continue to expand required seller notices.
The Consumer Financial Protection Bureau also reminds borrowers that lenders must deliver a Closing Disclosure at least three business days before closing, which makes dates and contingency coordination inside the agreement critical.
On the consumer side, most buyers continue to work with licensed agents or brokers, making a clear, written contract the norm in residential deals.
3. Key Components Every Purchase Agreement Should Include
Aim for clarity without clutter. The essentials are:
Parties and property: Full legal names, entity types (if any), and a precise legal description with street address and parcel/lot identifiers.
Purchase price and deposits: Total price, earnest money amount, timing, and escrow instructions (who holds, interest, release conditions).
Financing terms: Cash vs. loan, type of financing, rate caps or points limits (if any), and a financing contingency with a clear loan approval deadline.
Appraisal and inspection: Appraisal contingency and an inspection period with access rights, repair request timelines, and what constitutes “material defect.”
Title and survey: Evidence of marketable title, allowed encumbrances, title-company selection, objections/curative timelines, and whether a new or updated survey is required.
Disclosures: Seller representations and all mandatory disclosures (lead-based paint for pre-1978 homes, known defects, environmental or zoning issues, flood risk where required).
Prorations and adjustments: Taxes, HOA dues, rents (for income property), and utilities prorated as of the closing date.
Fixtures and personal property: What conveys and what does not (appliances, window treatments, built-ins).
Closing logistics: Target closing date, closing agent/attorney, e-signing and remote closing allowances, and who pays which fees.
Default and remedies: Cure periods, specific performance vs. earnest-money forfeiture, and attorney’s fees where permitted.
Contingency management: Clear mechanisms to waive, satisfy, or terminate based on contingency outcomes, with notice requirements.
Signatures and execution: Proper execution blocks for individuals/entities and authority proof for LLCs/corporations.
4. Common Variations (Residential, Commercial, Land-Only)
Not all agreements are created equal—match the form to the asset:
Residential (single-family/condo): Heavier on consumer protections, property condition disclosures, HOA documents, and financing/appraisal contingencies.
Commercial (office/retail/industrial): Focus on as-is clauses, tenant estoppels, rent rolls, CAM reconciliations, environmental (Phase I ESA) considerations, and longer due-diligence windows.
Land-only (vacant parcels/farms): Emphasize survey, access/ingress, utilities availability, soil/perk tests, zoning/entitlements, mineral or timber rights, and water rights.
5. Legal Requirements & Mandatory Disclosures
Compliance varies by state, but several frameworks appear repeatedly:
Statute of Frauds: Real estate contracts must be in writing and signed by the party to be charged.
Lead-based paint (pre-1978 housing): Federal law requires a disclosure form and EPA pamphlet in residential sales built before 1978—non-compliance can jeopardize enforceability and invite penalties.
Flood risk disclosures: Many states now require sellers to disclose known flood history or risk; buyers can also consult FEMA Flood Map Service Center for current flood zones.
Closing disclosures (consumer mortgages): The CFPB’s TRID rule requires a Closing Disclosure at least three business days before closing, so your contract timelines should work backward from that obligation.
State-specific seller disclosures: Property condition reports, septic/well, wood-destroying organisms, radon, or meth contamination disclosures vary widely—check your state’s real estate commission or statutes.
6. Negotiating Tips & Protecting Your Interests
Negotiation is where deals are made—or lost. Keep it practical:
Define deadlines with calendars: Tie contingencies to calendar dates (“Inspection ends July 12”) rather than vague day counts.
Right-size contingencies: Strong bidders might shorten inspection windows or raise earnest money, but retain a financing/appraisal off-ramp if needed.
Be explicit on repairs and credits: If defects surface, specify repairs (scope, licensed contractors, completion before closing) or credits at closing—don’t rely on oral promises.
Title and survey focus: List permitted exceptions now and set a firm cure process for defects; for land or commercial, require a current ALTA/NSPS survey when appropriate.
Appraisal gap planning: If values are volatile, add an appraisal gap clause (buyer covers up to $X shortage, or parties may re-negotiate/terminate).
Escrow and deposits: Use a licensed title company or attorney trust account; define when earnest money is refundable vs. forfeited.
7. Step-by-Step: How to Draft and Execute the Agreement
Step 1 — Identify the parties and property: Capture legal names, entity status, and a full legal description with parcel IDs.
Step 2 — Set price, deposits, and timelines: State the purchase price, earnest-money amount, escrow holder, and all contingency deadlines as calendar dates.
Step 3 — Add financing and appraisal terms: Spell out loan type, rate/points limits (if any), approval date, appraisal contingency, and remedies if appraisal is short.
Step 4 — Define inspections and due diligence: Provide access rights, inspection categories (general, roof, sewer, pests, environmental), and a notice-and-response process.
Step 5 — Address title, survey, and objections: Select a title company, require a title commitment, set an objection window, and define curative steps and termination rights.
Step 6 — Insert disclosures and representations: Include all mandatory federal/state disclosures and tailored seller reps for property condition and permits.
Step 7 — Clarify closing mechanics: Choose the closing agent, split fees, incorporate e-sign/remote closing, and coordinate with the CFPB 3-day Closing Disclosure timeline.
Step 8 — Set default and remedies: Add cure periods and define specific performance, liquidated damages (earnest money), or other remedies consistent with local law.
Step 9 — Execute, deliver, and track: Ensure proper signatures/authority, exchange fully executed copies, open escrow, and calendar every milestone through funding and recording.
8. Risks of Skipping or Using a Faulty Agreement
Statute-of-Frauds vulnerability: Oral agreements or vague emails can be unenforceable.
Missed disclosure penalties: Failing to provide required notices (e.g., lead-based paint) can derail closings or create post-closing liability.
Financing failures: Sloppy timelines can collide with the CFPB’s 3-day Closing Disclosure, causing delays or rate-lock issues.
Title and boundary surprises: Without a clear objection/cure protocol or updated survey, encroachments and liens can surface too late.
Earnest-money disputes: If the contract is vague on release conditions, escrow can remain frozen when a deal collapses.
9. Checklist: Real Estate Purchase Agreement Essentials
Parties’ full legal names and contact information.
Accurate legal description and street address.
Purchase price, earnest money, and escrow instructions.
Financing and appraisal contingencies with dates.
Inspection access, deadlines, and repair/credit terms.
Title company selection, title commitment, and objection/cure steps.
Required disclosures (lead-based paint, state forms, flood risk where applicable).
Prorations (taxes, HOA dues, rents) and closing cost allocations.
Fixtures/personal property list of what conveys.
Closing date, agent/attorney selection, and e-sign/remote options.
Default remedies (specific performance, liquidated damages) and attorney’s fees where permitted.
Signature blocks and proof of authority for entities.
Download the Full Checklist Here
10. FAQs About Real Estate Purchase Agreement
Q: Is a verbal agreement to sell a house enforceable?
A: Generally no. Most real estate sales fall under the Statute of Frauds and must be in writing and signed by the party to be bound. Relying on texts or emails without a signed contract risks the deal being unenforceable.
Q: Do I need a new survey for closing?
A: It depends on property type, lender, and local practice. Many residential deals reuse an existing survey if nothing’s changed, while commercial and land sales often require a current ALTA/NSPS survey to confirm boundaries, easements, and encroachments.
Q: What’s the difference between “as-is” and “as-is with right to inspect”?
A: “As-is” means the seller won’t make repairs. “As-is with right to inspect” still limits seller repairs but lets the buyer investigate and, within the inspection window, terminate or renegotiate if significant defects are found.
Q: When is earnest money refundable?
A: Typically when a contingency (inspection, appraisal, financing, title) fails within its deadline and the buyer gives proper written notice. If the buyer defaults without a valid contingency, the deposit may be forfeited as liquidated damages—check your contract and state law.
Q: How do federal mortgage disclosures affect the contract timeline?
A: Under CFPB TRID rules, lenders must deliver a Closing Disclosure at least three business days before closing (and certain changes can reset that clock). Build your inspection, repair, and financing dates to accommodate this timing to avoid last-minute delays.
Disclaimer
This article is for informational purposes only and does not constitute legal, tax, or financial advice. Real estate laws, disclosure rules, and customs vary by state and transaction type. Always consult a licensed real estate attorney or closing professional in your jurisdiction before drafting or signing a purchase agreement.
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Protect your deal with a clear, compliant contract. Download the free Real Estate Purchase Agreement template or generate a customized version with our AI tool—then have a local attorney confirm disclosures, timelines, and closing mechanics.
For more templates and guides covering agreements for buying, selling, leasing, and managing property, visit our Real Estate Legal Templates collection.
