What document outlines the terms of the sale in a real estate transaction?

The purchase agreement or sales contract is a critical document in a real estate transaction because it clearly outlines the terms of the sale between the buyer and seller. This document serves as a binding contract that specifies important details such as the purchase price, financing terms, contingencies (like inspections or the need for financing), and the closing date. It formalizes the expectations of both parties and ensures clarity on the terms agreed upon, which helps prevent disputes later in the process.

While the buyer’s application is vital for gaining approval for financing, it does not dictate the specifics of the sale. The closing statement, provided at the end of the transaction, summarizes the financial details of the closing process but does not set the terms of the agreement. The listing agreement primarily outlines the relationship between the seller and the real estate agent, detailing the agent’s responsibilities in marketing the property rather than the terms of the sale itself. Thus, the purchase agreement is central to concluding a real estate deal.