What to look for in a purchase contract

Confirm the buyer's full legal name(s) match what you've been negotiating with — and that all owners on title are listed as sellers. If your spouse is on title, your spouse signs. If the buyer is purchasing through an LLC, ask for the operating agreement and the name of the member who'll sign.

If the buyer's name on the contract differs from who's been emailing you, ask why. Wholesalers and assignment buyers will sometimes substitute an end-buyer at the last minute. That's not automatically bad, but it changes who's on the hook for closing.

The purchase price is obvious. The earnest-money deposit is less obvious and more important. Standard ranges in Texas are 1–2% of the purchase price. Below 1% (e.g. $500 on a $400K house) is a soft commitment — the buyer can walk and you keep almost nothing. Above 2% is unusually strong.

Confirm where the earnest money is held (a title company or an attorney trust account — never the buyer's bank account). Confirm when it's released and to whom under each scenario: buyer cancels in option period (usually returned to buyer), buyer defaults outside option period (usually released to seller), seller defaults (returned to buyer plus possibly damages).

If the buyer is financing, the contract will include a financing contingency: if their loan falls through, they can back out and recover earnest money. Read the timeline: how many days does the buyer have to obtain final loan approval? Standard is 21–30 days; longer favors the buyer.

A 'pre-approval letter' is not the same as 'proof of funds.' Pre-approval means a lender has run credit and is willing to lend, conditional on appraisal, employment verification, etc. Proof of funds means the buyer has cash sitting in an account. For cash offers, ask for a recent bank statement (last 30 days) — not a screenshot, not a self-attested email.

In Texas, the option period is paid for separately ($100–$200 typical, non-refundable, credited at closing). During the option period, the buyer can hire an inspector and walk for any reason — including 'I changed my mind.' Standard is 7–10 days.

After the inspection, expect a request: either a price reduction, repair credits, or actual repairs done before closing. You can negotiate. You don't have to agree. If you can't reach agreement, the buyer can terminate within the option period and recover earnest money (but not the option fee).

The trap: open-ended repair language. 'Seller to repair all items in inspection report' is unenforceably vague — every inspector finds 30+ things. Insist on a specific list with dollar caps or specific work items.

If the buyer is financing, the lender will order an appraisal. If it comes in below the contract price, the buyer's loan will fall short. Either the buyer brings extra cash, you reduce the price, or the deal terminates.

On a cash deal there's no required appraisal — but a savvy cash buyer may add an appraisal contingency anyway. Read it carefully: if you accept it, a low appraisal becomes their out, even though they don't need a loan.

The title company will produce a title commitment within ~14 days of the contract. It lists every recorded lien, easement, and exception that survives closing. Read it. The buyer has a window (typically 5 business days in Texas) to object to anything they don't like. You have time to cure (e.g. pay off an old lien) or refuse.

If you have a recent survey (within 5–10 years and no material changes), include it. Otherwise the buyer will order a new one ($400–$700) — usually paid by them, but check.

Texas requires the Seller's Disclosure Notice (TREC OP-H — see our Texas-specific article on disclosures). Other states have similar forms with different names. Fill it out completely and honestly. The cost of a small lawsuit over a hidden defect dwarfs the cost of disclosing a known one.

If the home was built before 1978, federal law requires a lead-paint disclosure. Always.

Two separate questions. The closing date is when title transfers and money moves. Possession is when the buyer can actually move in. Sometimes they're the same; sometimes the seller stays a few days post-close (a 'leaseback') — which should be in writing with daily-rent language.

Typical closing windows: cash deals close in 14–21 days; financed deals in 30–45. Push back on artificially short timelines — the buyer is usually the constraint, not you.

The most-skipped section. It defines what happens if either side fails to perform. The standard Texas TREC contract gives the non-defaulting side the choice between specific performance (force the sale) or terminating and keeping earnest money. Read whatever your contract says — variations exist.

If the buyer's lawyer drafted the contract, this section may favor the buyer. That's the kind of asymmetry an attorney catches in a 30-minute review.

Anything custom — appliances included, fence repair before close, leaseback terms, items conveying with the property — needs to be in a special-provision section or an addendum, not in a side email or text. 'We agreed verbally' is not enforceable. Get it on the page, with both signatures.

Common addenda: Lead-Based Paint (pre-1978 homes), HOA disclosure if applicable, Loan Assumption (rare), Seller Financing (rarer), Third-Party Financing, Buyer's Termination of Contract Under the Option Period.