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Key Sections of a Real Estate Purchase Contract for Rental Property Investors

Close Up Shot of a Menasha Real Estate Purchase Contract and KeysIf you’re a Menasha rental property investor, you are aware that acquiring a property is a major part of establishing and growing your portfolio. To buy and acquire confidently, it’s vital to thoroughly understand the real estate purchase contract. A standard real estate purchase contract is a document that lays out the terms and conditions of the sale between the buyer and seller. This blog post will touch on the most necessary sections of a real estate purchase contract that every investor needs to know!

Earnest Money Deposit

The earnest money deposit is generally anywhere from 1 percent of the purchase price to 3 or 4 percent of the purchase price. It’s an amount you put in escrow when you submit your offer that exhibits to the seller that you are serious about buying the property. The earnest money deposit will be applied to the purchase price at closing.

Offer to Purchase

The Offer to Purchase section starts with a detailed description of the property. This description should be studied thoroughly to guarantee that it contains the correct property details for which you are bidding. This description will likewise probably contain a list of items included with the sale and items to be excluded from the sale. It’s equally important to pay close attention to these lists, as the seller can exclude just about anything from the sale.

Purchase Price

The purchase price section of the real estate purchase contract is one of the most important sections. In this section, you will agree to pay the amount mentioned in the agreement to acquire property ownership. Furthermore, it’s significant to note any additional fees or costs linked with the sale, for instance, the seller paying for closing costs. This section will, as well, expound on how you plan to pay for the property, whether through financing or not, and the amount of cash you think to bring at settlement.

Seller Disclosures

The seller disclosures section entails any known issues with the property, whether physical or legal. This involves things such as any outstanding lawsuits involving the property, environmental concerns, or the need for a new roof. You should think about this information whenever making an offer. If the seller fails to disclose any known issues and you detect them after your closing, the seller could be liable for damages.


Another vital section of a real estate purchase contract is the contingency section. This sets out all the conditions that must be met before closing like for instance obtaining financing, having an inspection, and having a clear title. These contingencies are typically automatically waived if the buyer fails to act on them. But really, it’s essential to examine these contingencies still so that you clearly know what to expect in the process and how long you have to meet those requirements.

Inspection Period

The inspection period is a period of time after you submit the offer that lets you cancel the purchase contract for any number of considerations. As an example, you may learn about a big defect with the property and prefer not to acquire it. Or, you may have buyer’s remorse. The inspection period makes you cancel the contract without consequences if you catch something that wasn’t in your initial inspection.

Assessments and Financial Obligations

This section points to any current or future assessments and the financial obligations associated with them. If a significant or major project has been proposed for an area where the property is located, this section will outline the proposed project and any associated costs. It may cover any outstanding fees you will be responsible for at closing, such as property taxes, HOA fees, special assessments, or utility bills. It’s relevant to go over this information heedfully to grasp any financial obligations you may be taking on as a result of the purchase.

Closing and Settlement

This section of the real estate purchase contract records when and where you will settle on the sale. This generally includes an anticipated date for property transfer. Though a lot of buyers think they can take possession of a property at closing, that isn’t always the case. Therefore, it’s vital to check the closing section of your contract seriously so that you can prevent any unforeseen timing concerns.

Offer and Time for Acceptance

One of the last sections of a real estate contract will normally include key or significant dates you should watch closely, together with the offer’s expiration date and time and contract deadlines. A real estate purchase contract is only valid if the seller accepts your offer. The offer and time for acceptance section state how long you have to make your offer, how long the seller has to accept it, and when the buyer’s responsibility for giving a deposit starts. In addition, this section may consist of when the contingencies start and how long you have to meet these terms.


Once you have analyzed the real estate purchase contract and are ready to submit your offer, you must show acceptance or rejection by signing the bottom of the contract. If the seller accepts your offer, the purchase agreement becomes legally binding, and you must go forward with the transaction according to the terms laid out in the contract.

But, if the seller chooses to make a counteroffer, which is their response to your initial offer, then this paragraph will be stated in your purchase agreement. The seller’s counteroffer may cover different terms or suggest a revised purchase price. If you accept the counteroffer, then you must sign and return it to point out your acceptance. But on the other hand, if you do not desire to continue with the transaction as set out in the seller’s counteroffer, then it is deemed a rejection of the contract. You should always make certain to thoroughly review the terms of your agreement before signing, as this will make sure that you understand what you are agreeing to and avoid any misunderstandings.


Now that you’ve learned about some of the relevant sections of a real estate purchase contract, you’ll be furnished with the useful knowledge to buy rental property positively and confidently! Naturally, having a rental market expert on hand to direct you through some of the more complex components of obtaining an investment property can be highly advantageous. Real Property Management Lakeshore can help you in every step of this whole process, from the initial purchase to ongoing Menasha property management. To learn more about our services and what we offer our investors, contact us online today.

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