How to Write a Contract for Buying a House

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Now, more than ever before, individuals are leveraging the wide array of knowledge and information online to help them take the reins of their home sale. Whether it is navigating the listing process or finalizing the close of the sale, homeowners are more than capable of overseeing their own transaction, a process which can save time and money over the long term. That being said, choosing the DIY approach when selling your home carries its fair share of risks, particularly when it comes to writing the sale contract for your property. Fortunately, you can use a variety of pre-existing house contract forms and documentation available through your state to help create a comprehensive and secure purchasing contract that ensures both parties are fully protected.


  • Writing a contract to buy or sell a property isn't an impossible task. However, it may be worth your time to seek out the assistance of a lawyer or real estate agent in order to ensure that this document is prepared as professionally as possible.

The Basics of Purchase Contracts

No matter what size home you are selling, the price you are asking or the state you currently live in, certain elements of a contract to buy a house are universal. Without fail, each contract must include a thorough description of the property in question, the condition of the property being sold as well as a variety of legally identifying information for both parties involved.

After this foundation is completed, the contract must venture into further detail relating to particular elements of the transaction, such as the amount of earnest money that must be deposited by the future buyer, as well as a thorough itemization of all closing costs included with the sale and the name of the party responsible for paying them. If appliances or other amenities are included in the sale, these must also be listed and itemized inside of the contract documentation.

In order to complete the contract, there must be written documentation of the likely closing date for the sale as well as the "Terms of Possession." Essentially, the latter is a statement that dictates when the keys for the property will be transferred from the former owner to the new buyer.

Exploring Contractual Contingencies

A lesser understood, and perhaps slightly more complex element of the home contract writing process is the incorporation of purchasing contingencies. These are a listed set of details pertaining to the transaction that outline certain conditions that must be satisfied before the sale can be finalized.

Some of the more common contingencies that can find their way into a contract to buy a house include a loan contingency and an inspection contingency. The loan contingency is an in-depth explanation of the nature of the loan that the borrower intends to obtain. In a situation where the buyer is unable to obtain the necessary financing, including this contingency will allow this individual to exit the contract without penalty or other negative consequences.

The inspection contingency also provides a set of valuable protections for the prospective buyer. Within the contingency are specific clauses that could allow buyers to void the purchase of the home in the event that a professional inspector uncovers noticeable problems with the property that would require significant repairs. As an alternative, the inspection contingency may allow buyers to request either a lower purchase price for a property or that certain repairs be funded by the seller before the transaction is finalized. Again, these rights can only be enacted in situations where a professional inspector has identified critical issues. These issues cannot be evaluated by the buyer alone.

DIY Contracts and Closing Costs

As part of the contract writing process, both buyer and seller must agree on who is responsible for paying the closing costs attached to the deal. Generally, closing costs can equal anywhere from 2 to 5 percent of the actual purchase price of the property. This sum of money will be used to cover a series of expenditures, ranging from the mandatory taxes paid as part of the property transfer to payments issued to the title company.

During the closing process, the title company will conduct a complete investigation into the ownership history of the property. If any competing ownership claims do exist, this investigation should uncover them. That being said, the title company can also provide title insurance, which will protect the new owner of the property against any claims that may be made in the future.

As part of the closing process, a real estate agent will typically charge up to 6 percent of the purchase price of the property to complete the sale. One of the buyer benefits of a self-written contract is the fact that these costs may be avoided entirely. It is possible that the owner of the property may wish to include some variant of these costs into the contract. However, this will be up for negotiation, meaning that the future buyer will also have a say in whether or not these expenses make their way into the final text of the document.

Consideration for Contract Writers

Close examination of a real estate contract will reveal just how crucial it is for the language of these documents to be crafted in a legally viable manner. Given the large sum of money involved in these transactions, any confusion or misinterpretation on the part of the buyer or the seller could create serious legal and financial hurdles down the road.

Herein lies perhaps the most significant benefit of seeking legal or professional assistance when writing these contracts. An experienced attorney or real estate agent may be able to provide valuable insight into the process that will ensure the document is written correctly the first time without requiring costly revisions at a later point.

It is also important to remember that the failure to properly write and file a home purchase contract could mean that the transaction is not legally binding. In a situation such as this, the buyer of a property may have the legal opportunity to walk away from the property without being held accountable. Similarly, an improperly constructed contract could mean that a willing buyer is never actually granted ownership of the property. In either situation, the end result could have been avoided entirely.

Using a House Contract Template

One of the easiest ways to avoid these situations is to use a contract template to construct the framework of your document. Contract templates will already incorporate the necessary legally-binding language to ensure that the document will be considered valid in the courts and by the county where the deed will be filed. These templates will typically include ample space for buyer and seller to include their specific language and terms as needed. This will ensure that the final document is a true reflection of the terms established by both parties.