What is a "purchase agreement" in the context of real estate?

A "purchase agreement" is a legal contract that outlines the terms and conditions of a real estate transaction between a buyer and a seller. This document serves as a crucial part of the buying and selling process, ensuring that both parties have a clear understanding of their rights and obligations.

The purchase agreement typically includes essential details such as the purchase price, financing arrangements, contingencies, closing dates, and any conditions that must be met for the sale to proceed. Because it is a legally binding document, it provides protection for both parties, allowing them to rely on the terms outlined within the agreement. It enforces accountability and provides a course of action should any disputes arise regarding the transaction.

In contrast, other options like a verbal agreement lack the legal enforceability and clarity required in real estate transactions, and documents that merely list property features do not serve the same purpose as a comprehensive purchase agreement. Additionally, an informal contract between agents is generally not recognized as sufficient for a real estate transaction, as formal agreements between the buyer and seller are necessary to finalize any sale.