Template Real Estate Purchase Agreement (House)

A house sale is one of the largest financial transactions most people will ever complete — and also one of the most legally complex. Unlike purchasing a car or a piece of equipment, buying a house involves real property rights that are governed by state recording statutes, title insurance law, federal disclosure requirements, and a closing process that can take months to complete. The house purchase agreement is the contract that binds both parties from the moment it is signed to the moment the deed is delivered and recorded. Every dispute about what was promised, what condition the house was in, and what happens when something goes wrong is resolved — or should be resolved — by reference to that agreement.

House purchase agreements differ from apartment or condominium agreements in important ways: the legal description is different, the inspection scope is broader (you inspect the roof, foundation, and systems in a way that an apartment buyer typically cannot), easements and boundary issues are more common, and the possibility of post-closing seller occupancy is more frequently negotiated. This guide walks through every material provision of a house purchase agreement, explains what each clause is legally accomplishing, and provides sample contract language for the provisions that matter most. Whether you are working from a standard template, customizing an online form, or reviewing a draft prepared by the other side's agent, understanding these provisions will help you identify what is missing, what is too broad, and what should be negotiated before signing.

How a House Purchase Agreement Differs from a Condo or Apartment Contract

The fundamental difference between a house purchase agreement and a condominium or apartment purchase agreement is the nature of the property interest being conveyed. When you buy a house, you are buying the land, the building on the land, and all structures and improvements attached to or affixed to the land — everything from the foundation to the roof. When you buy a condominium unit, you are buying a specific unit within a larger building, along with an undivided interest in the common elements, and your rights and obligations are governed by a set of recorded condominium documents (declaration, bylaws, rules and regulations) that the seller cannot modify and the buyer inherits.

This difference drives the drafting of the property identification clause, the inspection contingency, the encumbrances the seller must disclose, and the closing cost structure. For a house, the property must be identified with the street address and the full legal description from the recorded plat — lot number, block, subdivision name, county, state — plus the parcel identification number (APN or PIN) assigned by the county assessor. For a condo, the property is identified with the unit number, the condo plan or plat reference from the recorded declaration, and the APN. Both types require the legal description; the content of that description differs significantly.

For a house, the buyer's inspection can cover the entire structure — roof, attic, foundation, crawlspace, HVAC, plumbing, electrical, drainage, and the grounds. The buyer is inspecting something that is entirely within the seller's control and exclusive possession. For a condo, the inspection covers only the interior of the unit and those systems (electrical panel, HVAC unit, plumbing fixtures) within the unit's walls. The common areas — roof, exterior walls, hallways, elevators — are maintained by the HOA and are outside the individual seller's warranty obligations. The inspection contingency for a house should therefore be broader in scope and allow for more types of inspections.

Identifying the House: Legal Description, Lot Details, and Why Address Alone Is Not Enough

A street address tells the mail carrier and the GPS where to find the property. It does not tell the county recorder, the title company, or a court which specific parcel of land was contracted for sale. The legal description does. The legal description is the formal, technical specification of the property that appears in the recorded deed and in the county's geographic information system (GIS) records, and it is the legal description — not the street address — that controls if there is ever a discrepancy.

For most residential house properties, the legal description follows one of three formats. The most common in subdivided residential areas is the lot-and-block description: it identifies the lot number, block number, subdivision name, county, and state, and references the recorded plat map where the subdivision's boundaries are officially documented. The second format is the metes-and-bounds description, used for irregularly shaped parcels: it describes the property boundaries in terms of directions (bearings) and distances from a specified starting point. The third is the government survey system, used predominantly in states west of the Mississippi, which identifies the property by township, range, section, and quarter-section.

The purchase agreement for a house should include: the street address, the full legal description as it appears in the current deed or title commitment, the parcel identification number (APN or PIN), and — if the property has outbuildings, a detached garage, or other structures on a separately titled parcel — the legal descriptions of all parcels being conveyed. Failing to include separately titled parcels in the purchase agreement means those parcels are not contracted for sale, even if both parties assumed they were. This is not a hypothetical risk: boundary disputes and parcel description errors generate real litigation in residential real estate.

Setting the Purchase Price and the Financing Contingency

The purchase price clause states the total consideration the buyer will pay. But for most house transactions, the more important drafting question is the financing contingency — the clause that makes the buyer's obligation to close conditional on the buyer securing mortgage financing on acceptable terms. The financing contingency is what protects the buyer's earnest deposit if the lender declines the loan or issues a commitment on terms the buyer cannot accept.

A financing contingency that actually protects the buyer must specify: the loan amount (typically expressed as a percentage of the purchase price or as a fixed dollar amount), the loan type (conventional, FHA, VA), the maximum acceptable interest rate, the maximum acceptable points, the loan term, and the commitment deadline — the date by which the buyer must have a written mortgage commitment or must declare whether they are proceeding without one. A financing contingency that says only "subject to buyer obtaining a mortgage loan" without specifying any of these terms has been interpreted by courts in multiple states as insufficient to trigger a valid contingency right, leaving buyers who were denied financing without the protection they thought they had.

Many lenders now also require an appraisal contingency as a condition of their mortgage commitment: if the property appraises for less than the purchase price, the lender will only loan based on the appraised value, and the buyer faces a "gap" between the appraised value and the purchase price. The purchase agreement should address what happens in this scenario: does the buyer have the right to cancel and recover the deposit if the appraisal comes in low? Does the seller have the option to reduce the price to the appraised value? Must the buyer make up the gap in cash? These questions should be answered in the purchase agreement, not left for the parties to figure out when the appraisal report arrives.

The Earnest Money Deposit: Amount, Escrow, and When the Buyer Gets It Back

The earnest money deposit in a house purchase is larger than in most other consumer transactions — one to three percent of the purchase price is standard, and in competitive markets, buyers sometimes offer higher deposits to signal seriousness. The amount itself is less important than the conditions under which it is refundable, and the purchase agreement should be specific about this on both sides.

"The Deposit shall be refundable to Buyer if: (a) Buyer timely exercises the Financing Contingency pursuant to Section [X] and Buyer has not obtained a written loan commitment on the terms specified by the deadline specified; (b) Buyer timely exercises the Inspection Contingency pursuant to Section [X] and the parties have not reached written agreement on repairs or credits within the negotiation period; (c) the Title Search reveals a material title defect that Seller does not cure within the cure period specified in Section [X]; or (d) the property sustains material damage prior to Closing and Buyer elects to terminate pursuant to the Risk of Loss provision. In all other circumstances, if Buyer fails to close through no fault of Seller, Seller shall be entitled to retain the Deposit as liquidated damages."

The deposit should be held by an escrow agent — the title company, a licensed escrow company, or the closing attorney — not by either party or either party's real estate agent. An agent who holds the deposit in their own operating account (rather than a designated trust account) may be violating state real estate licensing laws and, more practically, is in a position of conflict if the agent's client later disputes the other side's right to the deposit. The purchase agreement should name the escrow agent and specify how disputes about the deposit will be resolved — most title companies will not release an earnest deposit that is disputed without either a court order or a written agreement from both parties, and the agreement should anticipate this.

Deed Type: Why General Warranty Is Standard and When It Is Not Available

For arm's-length house sales at market value, the buyer should generally expect — and demand — a general warranty deed. A general warranty deed means the seller is guaranteeing the title against all claims, not just claims arising during the seller's period of ownership. This is the highest level of title protection that a deed can provide and is the standard in residential real estate transactions across most of the United States.

The situations where a general warranty deed is not available or appropriate are: estate sales, where the personal representative or trustee cannot warrant historical title; foreclosure sales, where the foreclosing lender is conveying only the interest acquired through the foreclosure; and short sales, where the seller is conveying at below-market value under lender approval and the lender may insist on a limited warranty or quitclaim deed as a condition of approving the short sale. In all three situations, the buyer's primary protection is the owner's title insurance policy, which covers historical defects that the limited deed warranty does not.

Title insurance covers most title defects that a title search does not reveal — forgeries in the chain of title, fraudulent prior conveyances, undisclosed heirs, surveying errors in prior deeds, and access disputes — for as long as the buyer owns the property. It is a one-time premium paid at closing, and for most buyers it is the single best risk-management tool available in a real estate transaction. Do not purchase a house without an owner's title insurance policy, regardless of the deed type the seller delivers.

The Inspection Contingency: What It Covers, What It Does Not, and How to Use It

The inspection contingency is the buyer's right to physically inspect the property and — if the inspection reveals problems — either request repairs, negotiate a credit, or terminate the agreement and recover the earnest deposit. For a house, the inspection scope should be broader than for a condo or apartment, because the buyer is acquiring the entire structure: roof, foundation, attic, basement or crawlspace, HVAC systems, electrical system, plumbing, drainage, and all exterior components.

A well-drafted inspection contingency specifies: the inspection period (typically seven to fourteen calendar days from the effective date, though competitive markets sometimes compress this to five days), the types of inspections the buyer may conduct (general building inspection, termite/pest inspection, radon test, mold assessment, oil tank inspection if applicable, chimney inspection, pool or spa inspection), the procedure for the buyer to request repairs or credits, and the process for resolving disagreements. The buyer's repair request must be submitted in writing within the inspection period — a verbal conversation with the seller's agent does not preserve the contingency right.

The inspection contingency does not guarantee that the buyer can cancel the agreement for any reason discovered during the inspection period. Courts have interpreted buyer inspection rights as requiring the buyer to act in good faith — if the buyer uses the inspection contingency as a pretext to cancel a contract they have changed their mind about for market reasons, the seller may have a claim for bad faith breach that affects the deposit. The contingency right should be exercised because of actual inspection findings, documented in a written report from a licensed inspector, that constitute material defects in the property's condition.

Federal law requires additional action for pre-1978 homes: the seller must provide an EPA lead-paint disclosure form and any available inspection reports. The buyer then has ten days to conduct a lead-paint risk assessment or inspection before the purchase agreement becomes fully binding. This is separate from and in addition to the general inspection contingency, and the purchase agreement must preserve both rights independently.

Property Condition: As-Is, Seller Warranties, and the Disclosure Obligation

The condition of the house at closing is governed by two separate legal obligations: the seller's disclosure obligation (what they are required by state law to tell the buyer about the property's condition) and the purchase agreement's warranty or as-is provisions (what the seller is contractually promising about the condition). These two obligations coexist and complement each other — the disclosure obligation cannot be contracted away, but the warranty obligations can be narrowed to as-is through proper drafting.

In most states, the seller of a residential property is required to provide a seller's disclosure form — a standardized document listing known defects in major systems, known environmental hazards, any prior insurance claims, any litigation or government orders affecting the property, and any other material facts that would affect a buyer's decision to purchase. The form is typically prescribed by state law or the state real estate commission. Completing it accurately is not optional; a seller who fills out the disclosure form falsely by omitting a known major defect can face a fraud claim that survives the closing and the as-is clause in the purchase agreement.

An as-is sale means the buyer is purchasing the property in whatever condition the inspection reveals, with no obligation on the seller to repair, credit, or compensate for any defect found during the inspection period. The buyer still retains the right to inspect and, if the inspection reveals a condition that the buyer is not willing to accept, to cancel the agreement within the inspection period. As-is does not mean the buyer is waiving the right to inspect; it means the buyer is waiving the right to demand repairs. This distinction matters — a buyer who waives the inspection contingency entirely is in a fundamentally different position from a buyer who retains the right to inspect but accepts the property as-is.

Which Items Stay with the House: Fixtures, Appliances, and What to List Explicitly

The question of what stays with the house and what the seller takes generates more post-closing complaints than almost any other provision in a residential purchase agreement. The legal framework distinguishes between fixtures (items that have become part of the real property) and personal property (items the seller owns independently of the real property). Fixtures transfer with the deed; personal property does not — unless the purchase agreement says otherwise.

The standard rule for determining whether an item is a fixture uses the "intent, manner, and extent" test: how was the item attached, what was the intent at the time of attachment, and how integral is the item to the use of the property? A built-in dishwasher that is plumbed into the cabinetry and countertop is a fixture. A freestanding dishwasher that happens to be connected to the same supply line but sits freely on the floor is personal property. A riding lawnmower is always personal property. A riding lawnmower attached to a permanent dock with electric charging infrastructure integrated into the garage — courts have disagreed about this.

• Items that typically transfer as fixtures: window coverings and hardware, ceiling fans, built-in appliances (oven, dishwasher, cooktop), HVAC systems (furnace, central air condenser, ductwork), water heater, built-in shelving and cabinetry, security system hardware, garage door openers and remotes
• Items that typically do not transfer (personal property): portable appliances (refrigerator, washer, dryer unless built-in), furniture, televisions, satellite equipment, potted plants, garden tools, portable generators
• Items that require explicit agreement in the contract: refrigerator (the most commonly disputed item), washer and dryer, window air conditioning units, hot tubs and spas, swing sets and play structures, decorative items mounted to walls

The purchase agreement template addresses this directly by providing fields for including and excluding specific items. Use them. If the seller wants to take the custom chandelier they imported from Italy, list it as excluded in the contract. If the buyer is assuming the stainless refrigerator stays, list it as included. Do not leave it to the parties to "work it out before closing" — that conversation never happens, or it happens at closing when the seller is already in the moving truck.

Mortgages, Liens, and the Seller's Obligation to Deliver Clear Title

The overwhelming majority of houses offered for sale carry an existing mortgage balance. The seller's default obligation is to pay off the mortgage from the sale proceeds at closing, so that the buyer receives the property free of that encumbrance. This is so standard in residential transactions that it is easy to take for granted — but the purchase agreement should make the obligation explicit, specify what constitutes a "clear title" obligation on the seller, and address what happens if unexpected liens surface between signing and closing.

The seller's mortgage payoff is coordinated by the title company or closing attorney. They obtain a payoff statement from the seller's lender, confirming the exact amount needed to satisfy the loan as of the closing date (principal, accrued interest, and any prepayment fees). Those funds are held from the seller's proceeds in escrow and wired to the lender at or before the recording of the deed. The lender then records a release or satisfaction of mortgage. The title company will not close the transaction without confirming that the payoff funds are sufficient and the lender has agreed to release the lien upon receipt.

Judgment liens are more complex. A judgment against the seller — from a lawsuit, a tax assessment, or an HOA enforcement proceeding — becomes a lien on all real property the seller owns in the county where the judgment is recorded. A title search should reveal any judgment liens, and the seller must pay them off at or before closing. Some sellers do not realize they have judgment liens against them until the title commitment reveals the issue; the purchase agreement should require the seller to discharge all such liens as a condition of their obligation to deliver clear title, and should give the buyer the right to cancel and recover the deposit if any material lien cannot be discharged within a specified cure period.

Closing Costs: Transfer Taxes, Title Insurance, and the Split Between Buyer and Seller

The purchase agreement must address who pays closing costs — not leave it to "local custom" or the assumption that both parties know the convention. Local custom varies by state and even by county, and in a transaction between parties from different jurisdictions, what each party considers customary may differ significantly. The safest approach is to specify every major cost category explicitly in the agreement.

Transfer taxes on real property — also called documentary stamp taxes, excise taxes, or deed taxes depending on the state — are calculated as a percentage of the purchase price or the property's assessed value. Delaware imposes a realty transfer tax of four percent of the purchase price (two percent state, two percent municipal), with the convention of splitting it between buyer and seller. Pennsylvania imposes a two percent state realty transfer tax plus local taxes that range from zero to four percent, with conventions varying by county. Washington, D.C. imposes a combined transfer and recordation tax that for residential properties over $400,000 totals 2.2 percent. The purchase agreement should specify the applicable transfer tax and which party bears it.

Recording fees — the fees charged by the county recorder's office to record the deed, the satisfaction of the seller's mortgage, and the buyer's new mortgage — are typically the buyer's responsibility and are relatively modest. The escrow or settlement fee charged by the title company for managing the closing is sometimes split, sometimes allocated entirely to one party. The owner's title insurance premium — which protects the buyer against title defects — is by convention paid by the seller in some markets and by the buyer in others. The lender's title insurance premium — required by the buyer's mortgage lender — is always the buyer's responsibility. All of this should appear in the purchase agreement.

Post-Closing Seller Occupancy: How to Handle the Move-Out Period

A common situation in house sales — particularly where the seller is simultaneously purchasing another property — is that the seller cannot vacate by the closing date and needs to remain in the house for some period after closing. This is called a post-closing occupancy agreement, or seller's leaseback, and it must be addressed explicitly in the purchase agreement or in a separate written occupancy agreement attached to it.

A post-closing occupancy arrangement changes the legal relationship between the parties: the buyer becomes the landlord and the seller becomes a tenant. The occupancy agreement should specify: the rent the seller will pay (often a per-diem amount based on the buyer's mortgage carrying cost), the security deposit the seller will deliver at closing (typically one to two months' equivalent rent), the exact date by which the seller must vacate, the condition in which the property must be returned, and the penalty if the seller fails to vacate on time (typically the security deposit forfeiture plus per-diem holdover damages). If the buyer is using a mortgage to finance the purchase, the lender's occupancy requirements may limit how long a post-closing occupancy can last — some conventional loan programs require the buyer to occupy the property within sixty days of closing.

Without a written post-closing occupancy agreement, the legal consequences of a seller who remains in the property after closing are uncertain and potentially expensive to resolve. In some states, a seller who remains in possession after closing may be treated as a holdover tenant with the same rights as any other holdover tenant — which could require a formal eviction proceeding to remove. This is not a hypothetical: buyers who close on a house expecting to move in within a week, only to find the seller has not packed and claims they need another month, have experienced exactly this problem. Address post-closing occupancy in writing before the transaction closes.

Tenant-Occupied Houses: Inheriting a Lease vs. Requiring Vacant Delivery

Some houses are sold while occupied by tenants under existing leases. The sale does not terminate the lease — the buyer steps into the seller's position as landlord. If the buyer intends to occupy the house themselves, they need vacant possession at closing. If the buyer is purchasing as an investment, they may be happy to inherit the existing tenant and lease. Either way, the purchase agreement must address occupancy status explicitly.

When the buyer wants vacant possession, the purchase agreement should include a condition that the seller will deliver the property free of all occupants by the closing date, and that failure to do so gives the buyer the right to either terminate and recover the deposit or extend the closing date for a specified period while the seller completes the tenant's removal. The seller's path to vacant possession depends on the lease terms: if the lease has expired, the seller may need to pursue a holdover eviction, which in many jurisdictions takes sixty to ninety days or more. If the lease is current, the seller generally cannot force the tenant out — they would need to negotiate a voluntary buyout. The purchase agreement should account for this reality in its timeline and contingency provisions.

When the buyer is purchasing subject to the existing tenancy, the purchase agreement should require the seller to provide a copy of the lease and certify that it is the complete, unmodified lease with no side agreements. The seller should also provide the current security deposit amount and confirm it will be credited to the buyer at closing. The buyer should receive estoppel certificates from the tenant — written statements by the tenant confirming the lease terms, the absence of side agreements, and the current status of rent payments — if the transaction is large enough to justify the request.

Default Remedies and Dispute Resolution

The default provisions in a house purchase agreement tell both parties what happens when one of them fails to perform. Most purchase agreements address three distinct default scenarios: buyer fails to close, seller fails to close, and seller fails to deliver the property in the contracted condition.

If the buyer defaults by failing to deliver the purchase price at closing without a valid contingency excuse, the seller's most common remedy is to retain the earnest money deposit as liquidated damages. Many purchase agreements specify that this is the seller's sole remedy — the seller cannot sue the buyer for additional damages even if the seller is forced to re-list the property at a lower price in a declining market. Whether the seller should accept the deposit as the exclusive remedy depends on the deposit amount relative to the potential damages: a three percent deposit in a declining market may significantly undercompensate the seller if the market drops further before the seller finds another buyer. Some sellers negotiate for a higher deposit or for the right to pursue actual damages.

If the seller defaults by refusing to close, by failing to deliver clear title, or by delivering the property in materially worse condition than contracted, the buyer's options are: terminate and recover the deposit, sue for specific performance (asking a court to order the seller to close and deliver the deed), or sue for actual damages (the difference between the contract price and the fair market value of the house, plus consequential costs). Specific performance is particularly important in real estate because houses are unique — no two houses are identical, and money damages may not fully compensate a buyer who wanted that specific house. The purchase agreement should preserve the buyer's right to pursue specific performance unless there is a specific reason to waive it.

"In the event of Seller's default, Buyer may, at Buyer's election: (a) terminate this Agreement by written notice to Seller and receive a return of the Deposit and all other sums paid hereunder, together with reimbursement for documented inspection, appraisal, and loan application costs incurred by Buyer; or (b) seek specific performance of this Agreement in any court of competent jurisdiction, in which event Buyer's right to recover the Deposit shall be preserved pending resolution of such action."

FIRPTA, Risk of Loss, Electronic Signatures, and Standard Terms That Matter

The standard terms section of a house purchase agreement contains provisions that most parties skim past — and that courts read very carefully when a dispute arises. Understanding what these provisions do helps explain why they are standard and what would happen if they were absent.

The FIRPTA certification is a federal requirement: under 26 U.S.C. § 1445, the buyer of any U.S. real property interest must withhold fifteen percent of the amount realized on the sale if the seller is a "foreign person" — a non-resident alien, a foreign corporation, or similar entity. The seller provides a sworn certification of non-foreign status to avoid the withholding. The certification obligation falls on the buyer, not the seller — if the buyer fails to withhold when required, the buyer becomes personally liable to the IRS for the amount that should have been withheld. The purchase agreement should require the seller to deliver the FIRPTA certification at closing and specify what happens if the seller cannot provide it.

The risk of loss provision allocates responsibility if the house is damaged or destroyed between the signing of the purchase agreement and the closing date. The standard rule — adopted in the Uniform Vendor and Purchaser Risk Act, enacted in various forms in about a dozen states — is that the seller bears the risk of loss until the deed is delivered and possession is transferred. If the house burns down before closing, the buyer can cancel the agreement and recover the deposit. The purchase agreement should confirm which party bears the risk and give the buyer the right to terminate or to proceed with an assignment of the seller's insurance proceeds if material damage occurs before closing.

• Before signing the purchase agreement: verify the legal description matches the county records; confirm the financing contingency is specific and complete with loan type, rate, and deadline
• During the inspection period: schedule all inspections within the first three days; submit any repair request in writing before the contractual deadline; do not assume the seller is waiting for a verbal conversation
• After the title commitment is received: review every exception listed; object in writing to any defect you are not prepared to accept within the objection period
• At least one week before closing: confirm the seller's mortgage payoff statement has been ordered and is sufficient; confirm all repair work has been completed; schedule the final walkthrough for the day before or morning of closing

Article reviewed by: Jordan S. (Attorney)