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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.
Being a rental property investor in Brookhaven, you know that buying property is essential for portfolio growth. Understanding the real estate purchase contract thoroughly is essential to buy with confidence. A standard real estate purchase contract specifies the terms and conditions agreed upon by the buyer and seller. In this blog post, we’ll highlight the critical sections of a real estate purchase contract that every investor should know!

Earnest Money Deposit

The earnest money deposit typically ranges from 1% to 3% or 4% of the purchase price. This amount is put in escrow with your offer to show the seller you are serious about purchasing the property. At closing, the earnest money deposit will be credited toward the purchase price.

Offer to Purchase

The Offer to Purchase section opens with a thorough description of the property. It’s important to examine this description carefully to ensure it lists the correct property details you are bidding for.

It is also likely to have a list of items that are included and excluded from the sale. It’s equally important to pay attention to these lists because the seller can exclude almost anything from the sale.

Purchase Price

The purchase price section in the real estate contract is among the most crucial parts. Here, you agree to pay the specified amount to gain property ownership.

It’s also crucial to note any extra fees or costs related to the sale, such as the seller covering closing costs. Moreover, this section will describe how you plan to pay for the property, whether through financing or with cash, and the cash amount expected at settlement.

Seller Disclosures

The seller disclosures section outlines any known issues, both physical and legal, with the property. This section includes any lawsuits, environmental concerns, or the need for a new roof.

This information should generally be considered when making an offer. If known issues aren’t disclosed by the seller and are found post-closing, the seller might be liable for damages.


Another crucial part of a real estate purchase contract is the contingency section. This section lists all the conditions that must be met before closing, such as getting financing, completing an inspection, and securing a clear title.

If the buyer doesn’t act, these contingencies are usually automatically waived. Reviewing these contingencies is important to understand the process and the time you have to meet the requirements.

Inspection Period

The inspection period, following your offer submission, is when you can cancel the purchase contract for several reasons. For instance, you may uncover a major defect in the property and opt not to buy it, or you might have buyer’s remorse.

During the inspection period, you are allowed to cancel the contract without penalty if you catch something not initially inspected.

Assessments and Financial Obligations

This section lists any current or future assessments along with their financial obligations. If a major project is planned for the area where the property is located, this section will explain the project and its associated costs.

It may also list any outstanding fees you will need to cover at closing, such as property taxes, HOA fees, special assessments, or utility bills. It’s vital to thoroughly review this information to comprehend any financial obligations you may incur from the purchase.

Closing and Settlement

This section of the real estate purchase contract specifies the time and place of the sale settlement. It generally specifies an expected date for the property transfer. Buyers often assume they can take possession at closing, but this isn’t always the case. Thus, it’s important to thoroughly review the closing section of your contract to prevent unforeseen timing issues.

Offer and Time for Acceptance

The last sections of a real estate contract generally outline key dates to note, such as the offer’s expiration date and time and contract deadlines. The real estate purchase contract becomes valid only if the seller accepts your offer. The offer and acceptance section details the time frame for making your offer, the period the seller has to accept it, and when the buyer must provide a deposit. This section may also detail when the contingencies begin and the timeframe to meet these conditions.


After reviewing the real estate purchase contract and preparing to submit your offer, you must sign at the bottom to indicate acceptance or rejection. If the seller agrees to your offer, the purchase agreement becomes legally binding, and you must proceed with the transaction according to the contract terms.

If the seller makes a counteroffer, which is their response to your initial offer, this paragraph will be part of your purchase agreement. The seller’s counteroffer might include different terms or propose a revised purchase price. Should you accept the counteroffer, you need to sign and return it to indicate acceptance.

Having an expert in the rental market guide you through the complexities of buying an investment property can be extremely helpful. Real Property Management Vitality can help you at every step, from the initial purchase to ongoing property management in BrookhavenReach out to us online or call 470-870-6652 to learn more about our offerings for investors.

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