What is a Purchase Agreement?
A purchase agreement is a (typically) legal written contract formed and signed between a buyer and a seller in the case where a home is being sold by the owner. In this case, the seller opts not to be represented by a real estate agent and chooses to handle the sale process for him or herself.
This type of contract is also usually based on a legal "consideration" consisting of whatever is being exchanged for the property, whether it's a specified amount of money or something else. Other property or a promise to deliver (like a vow to pay a certain sum of money at a later date) can also constitute as consideration. A purchase agreement is important because it can help simplify the process of filing lawsuits or complaints in the event that either party violates any of the terms of said contract for any reason or commits fraud.
A proper purchase agreement typically includes a description of the property and its condition, any contingencies or conditions that must be met before the sale is finalized, a list of fixtures and appliances included or excluded from the sale and the amount of a security deposit. It also usually lists closing costs and states who is responsible for paying them, the prospective closing date, and terms of possession.