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

Young woman shaking hands after agreeing to purchase a home.If you’re a Converse rental property investor, you are conscious that buying a property is a significant component of growing your portfolio. To purchase with confidence, it’s imperative to thoroughly understand the real estate purchase contract. A standard real estate purchase contract is a document that delineates the terms and conditions of the sale between the buyer and seller. This blog post will address the most critical sections of a real estate purchase contract that are essential for all investors to be aware of!

Earnest Money Deposit

The earnest money deposit typically ranges from 1% of the purchase price to 3% or 4% of the purchase price. It’s an amount you put in escrow when you make your proposal that indicates to the seller that you are committed to buying the property. The earnest money deposit will be applied to the purchase price at closing.

Offer to Purchase

The Offer to Purchase section begins with a detailed description of the property. Conduct a thorough review of this description to verify that it contains the correct property details for which you are bidding for.

It will also likely include a list of items included with the sale and items to be excluded from the sale. It is equally vital to consider 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 vital parts. In this section, you will agree to pay the amount specified in the agreement to acquire property ownership.

Furthermore, it’s crucial to mention any additional fees or costs that may be associated with the transaction, such as the seller paying for closing costs. This section will also provide an explanation of the method by which you intend to pay for the property, whether through financing or not, and the amount of cash you expect to bring at settlement.

Seller Disclosures

The seller disclosures section pertains to any known issues with the property, whether physical or legal. This encompasses any outstanding lawsuits regarding the property, environmental concerns, or the necessity for a new roof.

It is advisable to take this information into account when making an offer. The seller could be liable for damages if the seller fails to disclose any known issues and discovers them after the sale is completed.


Another vital section of a real estate purchase contract is the contingency section. This enumerates all the conditions that must be met prior to the closing, including the acquisition of financing, the completion of an inspection, and the possession of a clear title.

These contingencies are usually automatically waived if the buyer fails to take action. Nevertheless, it is crucial to review these contingencies in order to determine the anticipated timeline and the amount of time available to satisfy the requirements.

Inspection Period

The inspection period is the duration after you submit the offer, during which you can cancel the purchase contract for several reasons. For instance, you may identify a significant defect with the property and opt not to acquire it, or you may experience buyer’s remorse.

The inspection period permits you to cancel the contract without ramifications if you discover an issue that was not included in your initial inspection.

Assessments and Financial Obligations

This section provides a comprehensive overview of the financial obligations associated with any current or future assessments. This section will provide a comprehensive outline of the project and any associated costs if a major project is proposed for the vicinity of the property.

It may also encompass any outstanding fees that you will be liable for at closing, such as property taxes, HOA fees, special assessments, or utility bills. Before making a purchase, it is crucial to thoroughly examine this information to comprehend any financial obligations that may arise.

Closing and Settlement

When and where the transaction will be finalized are specified in this section of the real estate purchase contract. This typically encompasses an anticipated date for property transfer. Despite the fact that several purchasers believe they can take possession of a property at closing, that isn’t always the situation. To prevent any unforeseen timing issues, it’s essential to meticulously review the closing section of your contract.

Offer and Time for Acceptance

One of the final sections of a real estate contract will typically include vital dates you should watch closely, including the offer’s expiration date and time and contract deadlines. The validity of a real estate purchase contract is contingent upon if the seller accepts your offer. The offer and time for acceptance section delineates the deadline for submitting an offer, the seller’s acceptance period, and when the buyer’s responsibility for providing a deposit begins. Furthermore, this section may include when the contingencies start and how long you must meet these terms.


Once you have reviewed the real estate purchase contract and decided to put in your offer, you must indicate acceptance or rejection by signing the bottom. If the seller accepts your offer, the purchase agreement becomes legally binding, and you are obligated to adhere to the terms outlined in the contract for the transaction to proceed.

Nonetheless, this paragraph will be incorporated into your purchase agreement if the seller decides to make a counteroffer in response to your initial offer. The seller’s counteroffer may include different terms or suggest a revised purchase price. If you accept the counteroffer, you must sign and return it to indicate acceptance.


Having a rental market expert to assist you in navigating some of the more intricate aspects of buying an investment property can be extremely beneficial. Real Property Management LoneStar is available to provide support throughout the entire process, from the initial purchase to ongoing Converse property management. Contact us online or call 210-314-1039 to learn more about what we offer our investors.

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