What is a purchase agreement?

A purchase agreement is indeed a legal contract that outlines the specific terms under which a property sale will occur. This document is crucial in real estate transactions because it establishes the rights and responsibilities of both the buyer and the seller. It typically includes key details such as the purchase price, financing terms, contingencies (like inspections and appraisals), and closing dates. The legally binding nature of the purchase agreement ensures that both parties are held accountable to the terms they have agreed upon.

This distinction is important, as it contrasts strongly with informal agreements, which might not hold legal weight, and with other documents related to real estate transactions, such as those required for loan applications or records of property taxes. A purchase agreement serves as the backbone of the transaction process, providing clarity and protection for both buyers and sellers in the sale of real estate.