In real estate, a sales contract is a mandatory contract between the buyer and the seller, which describes the details of a home sale transaction. The buyer will propose the terms of the contract, including the price of the offer, to which the seller accepts, refuses or negotiates. Negotiations between the buyer and the seller can come and go before both parties are satisfied. Once both parties have agreed and signed the sales contract, they will be considered «under contract.» If all parties agree to the terms of the sale agreement, this acceptance must be notified. At this point, the offer becomes a legally binding contract. The terms of the contract can then be grouped into a purchase and sale agreement (SDP) which will be received after the agreement of both parties. If the buyer decides, between signing the sales contract and closing the house, that he wants to resign for a reason that is not stipulated in the contract, he loses his serious money and the seller puts it in his pocket. However, a buyer can get his serious money back if he returns for a reason defined in the contract. Sales contracts must be clear and specific in order to avoid any misunderstanding about the different conditions. They are generally more complicated than simple purchase documents or invoices, because they often detail different conditions that each party must meet in order to complete the sale. As a general rule, the buyer`s representative writes the sales contract. However, unless they are authorized by law to practice law, real estate agents generally cannot establish their own legal contracts.

Instead, companies often use standardized form contracts that allow agents to fill gaps with sales specifics. Either the buyer or the seller can prepare the sales contract. Like any contract, it may be a standard document that a party uses during the normal transaction, or may be the result of several rounds of negotiations. If additional terms are negotiated outside the standard agreement, they may be added to a sales contract supplement.