Consider consulting a lawyer if you have questions regarding your contract or state laws for real estate sales.
Common contingencies in a Real Estate Purchase Agreement
Contingencies are conditions that must be met for the sale to proceed. If a contingency isn't met by the agreed deadline, the affected party can typically exit the deal without forfeiting their earnest money.
According to the National Association of Realtors, these are some of the most common types found in a real estate contract:
- Financing contingency. The sale is contingent on the buyer securing mortgage approval by a set date. If the lender denies the application, the buyer can walk away and typically recover their earnest money deposit.
- Inspection contingency. Gives the buyer the right to hire a licensed home inspector. If the inspection uncovers significant defects, the buyer can withdraw, request repairs, or renegotiate the sale price.
- Appraisal contingency. Most lenders require the home to appraise at or above the purchase price. If it falls short, the buyer can renegotiate, cover the gap out of pocket, or cancel the transaction.
- Home sale contingency. Makes the purchase dependent on the buyer selling their current home first. Sellers may accept this alongside a kick-out clause that lets them continue marketing the property to other buyers.
- Title contingency. Confirms the seller holds clear title to the property, free of liens, encumbrances, or unresolved ownership disputes. The Consumer Financial Protection Bureau explains why a clear title matters for buyers seeking a lender's title insurance.
How to create a Real Estate Purchase Agreement
LawDepot's template walks you through each step of building your Real Estate Purchase Agreement. Your completed document will be customized for the state you select.
1. Property type and your role
Start by choosing the type of property being sold, such as a:
- House
- Condo
- Duplex
- Mobile home
From there, indicate whether you're the buyer or the seller, then select the state where the property is located.
2. Purchase price, financing, and deposit
Enter the total purchase price, the deposit amount, the deposit due date, and who will hold it in escrow until closing.
If the buyer requires financing, include the financing type (third-party lender, seller financing, or assumption of the seller's existing Mortgage Agreement) and the total loan amount.
3. Conditions and land survey
Add any contingencies the sale depends on, such as the buyer obtaining financing, the sale of their current home, or fixtures excluded from the sale.
You can also require a new land survey for title insurance purposes, or request a seller statement confirming no property changes since the last survey.
4. Property details and condition
Include the property's full address and legal description, available from your county clerk‑recorder's office.
Use this section to describe any conditions that affect the property and what disclosures the seller will provide to the buyer. Some disclosures are required by federal or state law.
For example, sellers in California must disclose whether the property is within two miles of an airport or affected by certain contaminants.
5. Buyer and seller details
Enter the full names, addresses, and phone numbers of both the buyer and the seller. You can add multiple buyers or sellers if needed.
6. Closing and possession
Set a closing date and confirm the possession date.
The buyer usually takes possession on the closing date; however, the parties can agree on either of these two things:
- For the buyer to take early possession under a temporary occupancy or lease agreement
- For the seller to remain in the property for a short period after closing under a rent‑back or post‑closing possession agreement.
7. Mediation and arbitration
Choose whether any unresolved disputes should go through mediation or arbitration before litigation. A mediator helps the parties reach a compromise; an arbitrator issues a binding decision.
8. Attorney fees, option to terminate, and additional clauses
Complete the agreement with any remaining terms:
- Attorney fees
- Buyer's option to terminate and any associated termination fee (typically credited to the purchase price at closing)
- Additional clauses specific to your transaction
Once all parties agree on the terms, sign the agreement securely with LawDepot's eSign — no printer required.
Real Estate Purchase Agreement FAQs
