What Buyers Should Know Before Signing a Residential Real Estate Contract

Buying a home is exciting, but the contract you sign carries long-term legal and financial consequences. Before putting your name on a residential real estate agreement, it’s important to understand what you’re committing to and where you still have room to protect yourself. A few careful reviews upfront can prevent expensive surprises later.

Understand the Purchase Price and Payment Terms

The purchase price may seem straightforward, but buyers should also review how and when payments are due. This includes the earnest money deposit, down payment, and final payment at closing. Make sure the amounts and deadlines align with your financing plan.

Pay close attention to what happens if deadlines are missed. Some contracts allow extensions, while others may put your deposit at risk. Knowing these terms helps you avoid accidental breaches.

Review Contingencies Carefully

Contingencies are your safety net. Common ones include financing, home inspection, appraisal, and sale-of-current-home contingencies. These clauses allow you to walk away or renegotiate if certain conditions are not met.

Buyers should understand the exact timelines for each contingency. Missing a deadline could mean losing your right to cancel the contract without penalty. If something feels rushed or unclear, ask for clarification or revisions before signing.

Know What’s Included in the Sale

Not everything you see during a walkthrough is automatically included in the purchase. The contract should clearly list what stays and what goes. This may include appliances, light fixtures, window treatments, outdoor structures, or smart home devices.

Verbal promises are not enough. If you expect something to remain with the property, it must be written into the contract. Otherwise, you may find it gone on move-in day.

Pay Attention to Inspection and Repair Clauses

Inspection clauses outline your right to have the property professionally inspected and how repair requests are handled. Some contracts allow buyers to request repairs, credits, or price reductions, while others limit options.

Understand whether the seller can refuse repairs and what your options are if disagreements arise. This section can significantly affect your final costs, so it deserves close attention.

Closing Costs, Dates, and Possession

The contract should clearly state who pays which closing costs. These may include title fees, taxes, insurance, and transfer fees. Small details here can add up to thousands of dollars.

Also review the closing date and possession terms. Some buyers assume possession happens immediately at closing, but that’s not always the case. Make sure the timeline fits your moving plans.

Discover: The Role of an Attorney in Real Estate Closings

Legal Language and Exit Clauses

Real estate contracts are legal documents, and the language can be dense. Buyers should understand default provisions, dispute resolution methods, and circumstances under which the contract can be terminated.

If something feels confusing or overly restrictive, it’s worth consulting a real estate professional or attorney. Signing without understanding can limit your options later.

Read more: What Does a Real Estate Attorney Do?

Final Thoughts

A residential real estate contract is more than a formality. It defines your rights, obligations, and financial exposure throughout the transaction. Taking time to review contingencies, timelines, inclusions, and legal terms can protect you from unnecessary risk. When buyers understand what they’re signing, they move forward with confidence, clarity, and a far better chance of a smooth closing.

For legal help in California and your other needs, contact BERYS LAW on this page. We also offer courses on real estate investing, landlording, and templates right here!