General information, not legal advice. This template is a starting point. Laws differ by state and city, so have a licensed attorney review your final document before you use it.
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The short version
- A purchase agreement is a binding contract to buy and sell real estate once both sides sign.
- Contingencies for financing, inspection, appraisal and title protect the buyer's deposit if something goes wrong.
- Most states require seller disclosures, and many use a standard form drafted by the state's realtor association or bar.
- Buying a rental means taking over leases and deposits, so ask for estoppel letters and a rent roll before closing.
What a purchase agreement is
A real estate purchase agreement is the contract between a buyer and a seller to transfer a property. Once both sides sign and any required deposit is paid, it binds them to close on the agreed terms unless a condition in the contract lets one side walk away. It sets the price, the deposit, the timeline, the conditions each side must meet, and who pays which closing costs.
When you need one
Every purchase of real estate needs a written contract; the statute of frauds requires it in every state. Landlords and investors use purchase agreements when buying rental homes, small apartment buildings and commercial property. If you work with a real estate agent, they will usually prepare the contract on a standard form used in your state.
Why we do not offer a template
Purchase contracts depend more on state practice than leases do. Many states expect a particular standard form, closings are handled by title companies in some states and attorneys in others, and the required disclosures differ widely. For that reason we explain the contract here and suggest you use your state’s standard form with an agent or attorney.
Terms it usually covers
- Parties and property, including the legal description and any personal property included.
- Price and payment, with the earnest money amount, who holds it, and how the rest is paid.
- Financing contingency, giving the buyer time to get a loan.
- Inspection contingency, with a deadline to inspect and a way to ask for repairs or cancel.
- Appraisal contingency, if the price depends on the property appraising at value.
- Title and survey, with the seller delivering clear title and the buyer’s right to object to defects.
- Seller disclosures about known defects, lead-based paint for homes built before 1978, and other state required notices.
- Closing date, possession and prorations for taxes, rents and utilities.
- Default and remedies, including what happens to the earnest money.
- For rentals: a list of leases, a rent roll, deposits, service contracts and an obligation to deliver tenant estoppel letters.
State rules to check
- Standard forms and whether a lawyer must prepare or review the contract.
- Seller disclosure laws and the forms required.
- Attorney or title closing practice.
- Transfer taxes and who customarily pays them.
- Tenant rights on sale, such as notice requirements, rights of first refusal in some cities, and how deposits transfer.
Common mistakes investors make
- Not verifying the rent roll. Ask for leases and estoppel letters so tenants confirm their rent, deposit and any side deals.
- Short inspection windows that do not allow time to inspect every unit.
- Forgetting deposits. The buyer usually becomes responsible for returning tenant deposits, so make sure they are credited at closing.
- Assuming the leases can be changed. Existing leases bind the new owner until they end.
After you buy
Once you close, add the property and its existing leases to TenantLoop, record each tenant’s deposit in the deposit liability account, and invite tenants to their portal so rent comes to you from the first month.
General template, not legal advice. Have an attorney in your state review before use. We explain this contract instead of offering a template, because practice differs so much from state to state.
Filling it in, and what to watch for.
Why is there no template here?
Purchase agreements are heavily state specific. Many states use standard forms prepared by the local realtor association, the state bar or the state real estate commission, and in some states an attorney normally handles the contract. A general template is more likely to miss a required term than help, so we explain the contract instead.
What is earnest money?
A deposit the buyer pays after signing to show good faith, usually held by a title company, escrow agent or attorney. The contract says when the buyer gets it back and when the seller may keep it.
What happens to existing tenants when a rental is sold?
In general, the leases stay in place and the buyer becomes the landlord, taking over the tenants' deposits. The contract should require the seller to hand over leases, deposit records and a rent roll, and to credit deposits at closing.
Do I need an attorney?
In some states an attorney must handle or attend the closing. Everywhere, an attorney review is wise for an investment purchase, especially with tenants in place or unusual terms.