What every home buyer needs to know about purchase agreements, inspection contingencies, the closing process, and common pitfalls.
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<strong>In this guide:</strong>
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<li><a href="#purchase-agreement">The purchase and sale agreement</a></li>
<li><a href="#offer-letter">The offer letter vs. the full P&S</a></li>
<li><a href="#contingencies">Contingencies that protect you</a></li>
<li><a href="#inspection">The home inspection</a></li>
<li><a href="#title">Title, deed, and title insurance</a></li>
<li><a href="#closing">The closing process</a></li>
<li><a href="#pitfalls">Common contract pitfalls</a></li>
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<p>Buying a home is almost certainly the largest financial transaction most people will make in their lifetime. Yet most buyers spend more time researching appliances than they do understanding the contract they're signing. A real estate purchase agreement is a legally binding document — and the terms you agree to (or fail to negotiate) will govern every dispute that arises between signing and closing.</p>
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<h2>The Purchase and Sale Agreement</h2>
<p>The purchase and sale agreement (P&S) defines the terms of the transaction: the price, what's included, the timeline, contingencies, and what happens if either party defaults.</p>
<p>Key elements: parties and property identification, purchase price and earnest money deposit (typically 1–3%), what fixtures are included, and the closing date. If a married couple owns the home, both spouses must sign.</p>
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<h2>The Offer Letter vs. the Full P&S</h2>
<p>In most residential transactions there are two stages: the offer letter and the formal P&S. In Massachusetts, offers are typically non-binding — the P&S is the binding agreement. In other states, the offer itself may be binding. <strong>Know your local practice.</strong></p>
<p>The full P&S should be reviewed by a real estate attorney before signing — not after. Attorney review typically costs $500–$1,500 and is among the best money you'll spend on the transaction.</p>
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<h2>Contingencies That Protect You</h2>
<p><strong>Mortgage financing contingency:</strong> Makes the sale contingent on obtaining a mortgage at specified terms. Note: this contingency has a deadline — work with your lender to ensure the timeline is achievable.</p>
<p><strong>Home inspection contingency:</strong> Allows you to have the property professionally inspected. A well-drafted contingency gives you broad flexibility; a poorly drafted one may limit you to only requesting repairs.</p>
<p><strong>Title contingency:</strong> Allows you to withdraw if a title search reveals defects — unpaid liens, ownership disputes, easements not disclosed by the seller.</p>
<p><strong>Waiving contingencies:</strong> Buyers sometimes waive the inspection contingency to make offers more attractive. This is a significant risk — you may have no recourse if you discover serious defects after closing.</p>
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<h2>The Home Inspection</h2>
<p>Hire a licensed home inspector — your own, not one recommended by the seller's agent. Be there in person. A standard inspection covers the structure, mechanical systems, and visible conditions. Radon, mold, sewer scope, and chimney inspection require separate specialists.</p>
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<h2>Title, Deed, and Title Insurance</h2>
<p>A title search reviews the public records chain of ownership looking for unpaid mortgages, liens, and ownership disputes. <strong>Owner's title insurance</strong> protects you — required lender's title insurance only protects the lender. Owner's title insurance is highly recommended; the one-time premium is modest relative to the protection provided.</p>
<p>At closing, the seller signs a deed conveying title to you. A warranty deed includes covenants that the seller has good title. A quitclaim deed conveys whatever interest the seller has but includes no warranty.</p>
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<h2>The Closing Process</h2>
<p>Before closing: review the closing disclosure (CD) at least 3 business days before closing and compare it to your original loan estimate. Do a final walkthrough within 24 hours of closing.</p>
<p>At the closing table: expect 1–2 hours of document signing. Bring valid photo ID, cashier's check or wire transfer for closing costs, and proof of homeowner's insurance. Expect total closing costs of 2–5% of the purchase price.</p>
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<h2>Common Contract Pitfalls</h2>
<p><strong>Signing without attorney review</strong> — The most common mistake. Real estate forms look standard but are frequently modified in ways that shift risk to buyers.</p>
<p><strong>Missing contingency deadlines</strong> — Calendar every deadline in your contract the day you sign.</p>
<p><strong>Assuming the deal will close on time</strong> — Closing delays are common. Don't make irreversible arrangements without building in a buffer.</p>
<p>To learn more, visit our <a href="/real-estate">Real Estate Law</a> practice area page.</p>
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<h3>Buying a Home? Get an Attorney Review</h3>
<p>Submit your situation. A licensed real estate attorney in your state can review your purchase agreement, explain your options, and make sure you're protected.</p>
<a href="/get-help" class="btn btn-primary">Connect With a Real Estate Attorney</a>
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<span>This article is legal education, not legal advice. No attorney-client relationship is created by reading this content. Real estate law and contract requirements vary significantly by state and locality. Consult a licensed real estate attorney in your state for advice specific to your transaction.</span>
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