What to Look for When Reviewing a Purchase Contract

What are the key terms in a real estate purchase contract?

The key terms in a purchase contract are the purchase price, the earnest money amount and conditions, the contingencies, the closing date, the list of included personal property, and the default provisions that spell out what happens if a party walks away.

The property description deserves more attention than it usually gets. The contract needs to describe the property by its legal description, not just a street address, and it needs to state clearly which fixtures and personal property convey. Appliances, window treatments, mounted televisions, and outbuildings are frequent sources of closing-day friction.

For commercial purchases, add due diligence periods, zoning and use representations, tenant lease assignments, and environmental review to the list. The contract sets the entire timeline that your attorney manages through closing.

What contingencies protect a buyer?

The four contingencies that protect a buyer are the inspection contingency, the financing contingency, the appraisal contingency, and the title contingency. Each one gives the buyer a defined exit from the contract, with earnest money returned, if a specific problem surfaces.

Contingencies are only as strong as their deadlines and notice requirements. A buyer who misses the inspection objection deadline by one day keeps none of that contingency's protection. The review is not just about which contingencies exist, it is about whether the mechanics are workable.

• Inspection contingency: the right to inspect the property and exit or renegotiate based on the findings, within a set window, typically 7 to 14 days
• Financing contingency: an exit if the buyer's loan is not approved by a stated deadline
• Appraisal contingency: protection if the property appraises below the purchase price
• Title contingency: the right to object to liens, easements, and restrictions revealed in the title work

How much earnest money is typical?

Earnest money of 1 to 2 percent of the purchase price is common in residential transactions. The amount matters less than the terms: when it is refundable, when it is forfeited, who holds it, and how disputes over it are resolved.

Sellers read earnest money as a signal of buyer seriousness. Buyers need to read the contract for the conditions attached to it. The dangerous clause is the one that makes earnest money non-refundable after a contingency period the buyer did not realize was so short.

What deadlines matter most in a purchase contract?

The deadlines that matter most are the inspection and objection windows, the financing approval date, the title objection deadline, and the closing date itself. Missing any one of them shifts risk, forfeits rights, or puts a party in default.

A good contract review produces a deadline calendar, not just a list of comments. Schneidman Law builds that timeline into every contract review so buyers and sellers know exactly which dates carry consequences and what action each date requires.

What happens if the buyer or seller backs out?

The default provisions of the contract control what happens when a party backs out. For a buyer default, the seller typically keeps the earnest money. For a seller default, the contract defines the buyer's remedies, which is why those clauses deserve careful review before signing.

Remedy clauses are negotiated up front, when everyone is cooperative, precisely because nobody is cooperative later. A well-drafted contract makes the consequences of walking away clear enough that neither side is tempted to test them. That is protection through drafting, which is exactly the transactional work Schneidman Law does.

When should an attorney review the purchase contract?

Have an attorney review the purchase contract before you sign it. Once signed, the terms bind you, and renegotiating a signed contract requires the other side's agreement. Review before signature costs a few days at most and preserves every option.

For buyers using a standard form contract, the review focuses on the blanks, the special stipulations, and the deadlines, because that is where form contracts get customized against you. For commercial deals, expect a full markup and a negotiation round. Either way, a flat fee review means the cost is known before the work starts.