While the form of a contract can change based on location, or even what realtor you use, there are some basic sections covered in a residential purchase contract.

Identification of the Property and Its Features

This section of the contract identifies what you’re buying. It often includes the address and tax map identification number, lot size, the type of property you are buying (i.e. single family, vacant land..etc), the condition of the property, and what is included in the sale. This section is especially important as some items you might expect to be included might be expressly excluded. For example, that flashy new camera doorbell might not be hardwired in, and thus, the seller may exclude that from your purchase. This section also generally identifies what type of utilities are available, whether the property is in a flood zone, and whether there are any other issues (such as tax liens, code violations, or foreclosures) pending.

Financing and Purchase Price

Another major section of any real estate contract is financing. Every contract will set forth the price to be paid to the seller and how that price will be paid. Many individuals choose to obtain a mortgage to purchase property. If so, the contract will list what type of mortgage you intend to apply for as well as your time frame for providing evidence that you will receive a mortgage by the time the purchase is ready to close. This section also identifies what will happen if you are not approved for a mortgage.

Guarantees and Contingencies

This section of the contract is extremely important. Here, you will list any contingencies the parties must satisfy before a closing can occur. Most commonly, contingencies include a satisfactory property inspection or a set time to sell your existing home before closing on the new purchase. However, other contingencies can be listed, such as updates to the property or the ability to occupy the property before closing. This section will also include a note requiring the seller to provide clear title, or take steps to clear title before closing, including paying all taxes, liens and charges that have come due during their ownership.

Closing Date and Deliverables

The final basic section of the contract will include a targeted closing date, what will be conveyed at closing, and what costs will be split between the buyer and seller. The default is that property taxes are prorated as of the date of closing, costs are split between buyer and seller, and possession of the property is delivered on the closing date.