A purchase agreement is a legally binding contract the moment both parties sign. Every clause either protects you or exposes you. This interactive reviewer walks through the 35 most critical provisions in a residential purchase agreement and flags what's missing, unfavorable, or needs attorney attention before you sign.
A real estate attorney reviews your actual purchase agreement, flags unfavorable clauses, and negotiates protective addenda before you're legally bound. Attorney review typically costs $500 to $1,500 - a fraction of the risk on a transaction worth hundreds of thousands of dollars.
A purchase agreement is the single most important document in a real estate transaction. It defines every right and obligation of both parties from the moment of signing until the deed records.
Vague or missing contingency language, unfavorable default provisions, and unclear "as-is" clauses are among the most common sources of real estate disputes. Once both parties sign, you're legally bound - changes require mutual written agreement.
Before signing, also use the buyer and seller disclosure checklist to confirm the seller has made all required disclosures - disclosures are separate from the contract and failures there create independent liability.
The financing contingency is the most consequential for buyers. Without it - or with a poorly worded version - you can lose your earnest money deposit if your loan falls through for any reason. The contingency must specify the loan amount, interest rate cap, and loan type, and give you a clear deadline to declare the contingency satisfied or invoke it.
The inspection contingency is equally critical. "As-is" language doesn't always mean no inspection - but it often means no repair requests. Understand exactly what remedies you have if serious defects are found. A clause that only allows you to cancel (but not request repairs or credits) is much weaker than one that gives you full negotiation rights.
After your contract review, check the real estate closing checklist to make sure every contract-required task is tracked through to closing day.
Earnest money (also called a good faith deposit) is typically 1% to 3% of the purchase price, paid upfront to show buyer commitment. On a $500,000 home, that's $5,000 to $15,000 at risk.
Your earnest money is protected only by your contingencies. If you back out of a contract for a reason not covered by a contingency, you typically forfeit the deposit. If the seller backs out, you're typically entitled to the deposit back plus any additional remedies specified in the contract.
Confirm the deposit is held in a proper escrow account by a licensed escrow agent or attorney - not by the seller's agent directly. And confirm the release conditions in writing - disputes over earnest money are among the most litigated issues in residential real estate.