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

Close Up Shot of a Brentwood Real Estate Purchase Contract and KeysIf you’re a Brentwood rental property investor, you realize that obtaining a property is an essential part of expanding your portfolio. To purchase confidently, it’s necessary to thoroughly understand the real estate purchase contract. A standard real estate purchase contract is a document that maps out the terms and conditions of the sale between the buyer and seller. This blog post will speak about the most vital sections of a real estate purchase contract that every investor needs to know!

Earnest Money Deposit

The earnest money deposit is generally anywhere from 1 percent of the purchase price to 3 or 4 percent of the purchase price. It’s an amount you put in escrow when you submit your offer that presents to the seller that you are serious about buying the property. The earnest money deposit will be applied to the purchase price at closing.

Offer to Purchase

The Offer to Purchase section leads with a detailed description of the property. This description should be analyzed meticulously to make sure that it contains the correct property details for which you are bidding. This description will, as well, most likely consist of a list of items included with the sale and items to be excluded from the sale. It’s equally important to pay close attention to these lists, as the seller can exclude just about anything from the sale.

Purchase Price

The purchase price section of the real estate purchase contract is one of the most important sections. In this part, you will agree to pay the amount declared in the agreement to acquire property ownership. Furthermore, it’s essential to note any additional fees or costs correlated with the sale, in particular, the seller paying for closing costs. This section will likewise elaborate on how you plan to pay for the property, whether through financing or not, and the amount of cash you intend to bring at settlement.

Seller Disclosures

The seller disclosures section consists of any known issues with the property, whether physical or legal. This covers things such as any outstanding lawsuits involving the property, environmental concerns, or the need for a new roof. Typically, you should take into consideration this information once making an offer. If the seller fails to disclose any known issues and you see them after your closing, the seller could be liable for damages.


Another relevant section of a real estate purchase contract is the contingency section. This clearly explains all the conditions that must be met previous to closing, like obtaining financing, arranging an inspection, and having a clear title. These contingencies are generally automatically waived if the buyer fails to act on them. But, it’s significant to go over these contingencies still so that you figure out what to expect in the process and how long you have to meet those requirements.

Inspection Period

The inspection period is a short period of time after you submit the offer that allows you to cancel the purchase contract for any number of reasonings. For an instance, you may see a significant defect with the property, and opt not to purchase it. Or, you may have buyer’s remorse. The inspection period lets you cancel the contract without consequences if you catch something that wasn’t in your initial inspection.

Assessments and Financial Obligations

This section is relating to any current or future assessments and the financial obligations associated with them. If a big project has been proposed for an area where the property is located, this section will outline the proposed project and any associated costs. It may indeed include any outstanding fees you will be responsible for at closing, such as property taxes, HOA fees, special assessments, or utility bills. It’s vital to examine this information seriously to apprehend any financial obligations you may be taking on as a result of the purchase.

Closing and Settlement

This section of the real estate purchase contract lists when and where you will settle on the sale. This typically consists of an anticipated date for property transfer. Even though numerous buyers expect they can take possession of a property at closing, that isn’t usually the case. Precisely why, it’s relevant to assess the closing section of your contract heedfully so that you can prevent any unforeseen timing problems.

Offer and Time for Acceptance

One of the end sections of a real estate contract will commonly include relevant dates you should watch closely, as also the offer’s expiration date and time, and contract deadlines. A real estate purchase contract is only valid if the seller accepts your offer. The offer and time for acceptance section lay out how long you have to make your offer, how long the seller has to accept it, and when the buyer’s responsibility for giving the deposit starts. Furthermore, this section may detail when the contingencies start and how long you have to meet these terms.


Once you have examined the real estate purchase contract and are ready to submit your offer, you must signify acceptance or rejection by signing the bottom of the contract. If the seller accepts your offer, the purchase agreement becomes legally binding, and you must carry on with the transaction according to the terms stated in the contract.

But on the contrary, if the seller opts to make a counteroffer, which is their response to your initial offer, then this paragraph will be noted in your purchase agreement. The seller’s counteroffer may involve different terms or suggest a revised purchase price. If you accept the counteroffer, then you must sign and return it to specify your acceptance. Nevertheless, if you do not want to go ahead with the transaction as drafted in the seller’s counteroffer, then it is taken into account as a rejection of the contract. You should always make sure to meticulously review the terms of your agreement before signing, as this will guarantee that you certainly know what you are agreeing to and avoid any misunderstandings.


Now that you’ve learned about some of the significant sections of a real estate purchase contract, you’ll be equipped with the wisdom and knowledge needed to buy rental property assuredly and with confidence! Needless to say, having a rental market expert on hand to take you through some of the more complex procedures of acquiring an investment property can be largely practical and beneficial. Real Property Management Generations can effectively help you in every step of the process, from the initial purchase to ongoing Brentwood property management. To learn more about our services and what we professionally offer our investors, contact us online today.

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