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Key Sections of a Real Estate Purchase Contract for Rental Property Investors

Young woman shaking hands after agreeing to purchase a home. If you are a rental property investor in Milton, you recognize that buying properties is vital for portfolio growth. To buy with assurance, it’s crucial to fully understand the real estate purchase contract. The standard real estate purchase contract details the sale’s terms and conditions between the buyer and seller. This blog post will cover the key sections of a real estate purchase contract that every investor should be aware of!

Earnest Money Deposit

Earnest money deposits are generally from 1% to 3% or 4% of the purchase price. It’s a sum placed in escrow when you make an offer, indicating to the seller your serious intent to buy the property. At closing, the earnest money deposit will go toward the purchase price.

Offer to Purchase

A detailed property description starts the Offer to Purchase section. Carefully review this description to ensure it has the correct details of the property you are bidding on.

This section will likely include a list of items included with and excluded from the sale. It’s essential to closely review these lists, as the seller can exclude almost anything from the sale.

Purchase Price

In the real estate purchase contract, the purchase price section is one of the most vital sections. In this part, you consent to pay the amount stated to acquire ownership of the property.

Furthermore, it’s vital to account for any additional fees or costs tied to the sale, including the seller paying for closing costs. This section also covers your payment plan for the property, including whether you’ll use financing or cash, and the cash amount you’ll bring to settlement.

Seller Disclosures

The seller disclosures section lists any known issues, whether they are physical or legal, with the property. This includes outstanding lawsuits, environmental issues, or the need for a new roof.

Usually, you should consider this information when making an offer. Should the seller fail to disclose known issues, and you find them after closing, the seller could be responsible for damages.


Another key section of a real estate purchase contract is the contingency section. It outlines the conditions that need to be met before closing, including obtaining financing, having an inspection, and securing a clear title.

If the buyer fails to act, these contingencies are usually waived automatically. However, it’s vital to review these contingencies to know what to expect and the time frame for meeting them.

Inspection Period

After submitting the offer, the inspection period allows you to cancel the purchase contract for various reasons. For instance, you could identify a major defect with the property and decide not to buy it, or you may have buyer’s remorse.

The inspection period enables you to cancel the contract without consequences if you uncover something that wasn’t noted in the initial inspection.

Assessments and Financial Obligations

This section outlines any present or future assessments and their financial responsibilities. If a significant project is proposed in the area where the property is located, this section will describe the project and any related costs.

It may also list any pending fees you will need to cover at closing, including property taxes, HOA fees, special assessments, or utility bills. Carefully reviewing this information is crucial to understand any financial obligations you may incur from the purchase.

Closing and Settlement

This part of the real estate purchase contract indicates when and where the sale will be settled. This usually lists an anticipated date for the transfer of property. Although many buyers believe they can take possession at closing, that isn’t always the case. Hence, carefully reviewing the closing section of your contract is essential to prevent unexpected timing issues.

Offer and Time for Acceptance

One of the last sections of a real estate contract typically lists key dates to monitor, such as the offer’s expiration date and contract deadlines. The real estate purchase contract is valid only if the seller accepts your offer. The offer and time for acceptance section describes the timeframe for making your offer, how long the seller has to accept it, and when the buyer must provide a deposit. This section may also indicate the start of contingencies and the time you have to fulfill these terms.


Once you’ve reviewed the real estate purchase contract and are prepared to submit your offer, you must sign at the bottom to indicate acceptance or rejection. Once the seller accepts your offer, the purchase agreement is legally binding, and you must move forward with the transaction as outlined in the contract.

However, if the seller makes a counteroffer in response to your initial offer, this paragraph will be part of your purchase agreement. The seller’s counteroffer may have different terms or propose a revised purchase price. If you accept the counteroffer, you have to sign and return it to confirm acceptance.

Having a rental market expert to help navigate the complex aspects of buying an investment property can be very beneficial. Real Property Management Homebase can assist at every step, from the initial purchase to ongoing property management in MiltonReach out online or call 850-806-2263 to discover more about what we offer investors.

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