What Is a Purchase Agreement and What Does It Include?

A purchase agreement, also called an agreement of sale in Pennsylvania, is the written contract that binds a buyer and seller to the sale of a home. It names the parties, describes the property, sets the purchase price, and lists every condition that must be met before the keys change hands. Everything that happens between an accepted offer and the closing table, inspections, financing, appraisals, and repairs, is governed by this one document.

In Pennsylvania the contract is typically written on the standard Agreement of Sale published by the Pennsylvania Association of Realtors (PAR), which most agents and brokers in the region use for resale homes. Builders and some specialty transactions use their own forms, but the structure and the major terms are the same. Once all parties have signed and any counterpart exchange is complete, the agreement is binding, so every word matters before you sign.

The core parts of a purchase agreement are consistent from contract to contract. The buyer and seller names, the full legal address and parcel description, the purchase price, and the amount of earnest money are the opening terms. From there the agreement adds the closing date, the address where settlement will take place, and how the property's title will be conveyed, typically by a deed with marketable title.

Then come the conditions, the contingencies. A typical Pennsylvania contract includes financing, home inspection, and appraisal contingencies, plus clauses covering seller disclosures, lead-based paint, radon, and transfer taxes. It also states who pays which closing costs, how real estate transfer taxes are split, what personal property stays with the home, and what happens if either side fails to perform.

Deadlines are just as important as the money terms. The contract sets dates for the inspection period, the mortgage commitment, the appraisal, and the final walkthrough, and it usually contains a time is of the essence clause so missed deadlines can have real consequences. If a date passes without action, the other party may be able to terminate or demand performance.

A purchase agreement becomes binding in stages. The buyer typically submits a written offer, often with a deadline for acceptance. The seller either signs it as is, counters with changes, or rejects it. When the buyer accepts a counteroffer or the seller signs the original offer, and both sides have a signed copy, the contract is ratified.

In Pennsylvania there is no automatic attorney review period that lets either side walk away after signing. Unlike a few neighboring states, Pennsylvania does not give you a statutory cooling-off window for an accepted offer on a resale home. Once the agreement of sale is fully executed, changes require mutual consent, so the review that matters happens before the pen touches the page. That is why experienced buyers and sellers read the contract carefully, or have an attorney look at it, before signing.

Earnest money is collected after ratification and held in escrow, usually by the broker or a title company, as a good-faith deposit. If the buyer walks away without a contractual reason, the deposit may be forfeited; if the seller fails to perform, the buyer may have legal remedies including specific performance.

Several Pennsylvania rules are baked into the standard agreement. The Seller's Property Disclosure Statement must be delivered before the buyer signs the agreement of sale for most resale transactions, so the contract assumes you have seen it. Lead-based paint disclosures apply to homes built before 1978 under federal law. Radon results, if the seller has tested, must be reflected in the disclosures.

Pennsylvania also has specific practices around closing costs. Realty transfer tax is shared in the standard form (split between buyer and seller), and the contract states who pays the deed recording fee, the title search, and title insurance. The standard form allocates these costs, but every allocation is negotiable, so read the filled-in contract rather than assuming the default applies.

Finally, Pennsylvania settlement is handled through a title company or attorney's office, and the agreement names the settlement agent. The contract will say who selects that agent, usually the buyer, and both sides review the title work and the final numbers at closing.

Most disputes after a signed contract trace back to something the agreement did or did not say. What happens if the home does not appraise? Who pays for a repair the inspection finds? Does the refrigerator stay or go? Is the seller allowed to keep showings going until closing? The answer is in the contract, not in a handshake conversation.

Before signing, walk through the contract line by line with your agent. Check the legal names, the property address, the deposit amount and where it is held, every contingency deadline, and the list of what stays with the home. If something important to you is missing, ask for an addendum before you sign, because after ratification it takes both parties to change it.