Identification

• The real estate purchase contract identifies the property to be transferred, the parties to the transaction, the price and any other terms of the sale.
  
  

In Writing

• A contract to transfer ownership of real property must be in writing. This protects both parties from misunderstanding. This is required by the general provisions of contract law and the Statute of Frauds.
  
  

Negotiations

• All terms are negotiated and become part of the purchase contract by mutual agreement. Counter offers and addendum are commonly used and are made part of the final purchase contract.
  
  

Contingencies

• Buyer's investigation, buyer or seller cancellation rights and a good faith security deposit are examples of some common contingencies that are made part of a real estate purchase contract.
  
  

Receipt and Escrow Instructions

• The real estate purchase contract can acknowledge receipt of a deposit towards the purchase price and also provide escrow instructions. A neutral third party, the escrow holder, performs the transfer of ownership when all conditions have been met.