Purchase Agreement
Direct definition
The legally binding contract between buyer and seller detailing the terms of a real estate sale.
Written by the Vabasso Mortgage Editorial Team · Reviewed against agency and federal sources · Read our editorial policy for how we research and review mortgage content
Plain-English explanation
It includes price, earnest money, contingencies, closing date, and any concessions. Once signed by both parties it governs the transaction.
Why it matters
The purchase agreement is the roadmap the lender, title company, and agents work from.
Where you may see it
- Executed contract
- Title commitment
- Closing Disclosure
A real-world example
Your fully executed contract sets a $500,000 price, $10,000 earnest money, inspection and appraisal contingencies, and a 30-day closing.
Educational and illustrative only
A common misunderstanding
A purchase agreement isn't just a formality — once signed, it's a binding legal contract with enforceable contingencies and deadlines.
Ask Vabasso AI
This glossary provides general educational information. Mortgage terminology, qualification methods, forms, timelines, fees, program rules, and legal meanings may vary by lender, investor, loan program, property, occupancy, state, and transaction. Definitions do not represent loan approval, legal advice, tax advice, or a commitment to lend.
- Author
- Vabasso Mortgage Editorial Team
- Reviewed by
- Vabasso Mortgage Licensed Advisory Team
- Last reviewed
- July 30, 2026