What Is a Purchase Agreement Contract in Virginia?

You’ve spent months searching, and now you’ve finally found the perfect home in Virginia. After negotiating with the seller, you agree on a price and start thinking about the next steps. Before the sale is official, you’ll need to sign a purchase agreement contract—but what exactly does that mean?

A purchase agreement contract is a legally binding document that sets the terms of a sale. These agreements exist for many types of transactions, including business deals and vehicle purchases. However, when it comes to real estate, which is the focus of this blog, this contract is a critical step in finalizing a home purchase because it helps the buyer and seller understand their rights, responsibilities, and any conditions that must be met before closing.

If you’re preparing to buy a home, knowing what’s included in a real estate purchase agreement contract can help you make informed decisions. This blog breaks down what to expect, what key terms to look for, and how this contract shapes your home-buying process.

What Is a Purchase Agreement Contract?

A purchase agreement is a legally binding document that sets the terms of a property sale in Virginia. It outlines the rights and obligations of the buyer and seller and clearly defines all aspects of the transaction, including details such as the purchase price, property description, contingencies, and closing terms.

Although some may refer to it as a “purchase agreement contract,” the term “contract” is implied since a signed purchase agreement is legally binding. In Virginia real estate transactions, “purchase agreement” is the more commonly used term.

Key Elements of a Virginia Purchase Agreement

When drafting or reviewing a purchase agreement in Virginia, several components must be considered to create a comprehensive and enforceable contract.

Identification of Parties and Property

The contract must clearly state the full legal names and contact information of the buyer and the seller. Accurate identification prevents potential disputes arising from misidentification. Additionally, a precise description of the property is essential.

This description includes the property’s legal address, parcel number, and any other pertinent identifiers that distinguish it from other properties, such as the lot number, subdivision, or metes and bounds description to prevent ambiguity regarding the exact parcel being transferred. If there is any uncertainty, buyers may request a property survey to confirm the boundaries before closing.

Purchase Price and Payment Terms

The agreed-upon purchase price should be explicitly stated in the contract. Beyond the total amount, the contract should detail the structure of payments, including:

• Earnest Money Deposit: A sum paid by the buyer to demonstrate serious intent. The contract should specify the amount, the entity holding the deposit (often an escrow agent), and conditions under which the deposit may be forfeited or returned. Virginia law requires earnest money to be held in an escrow account managed by a licensed real estate broker or settlement agent. Mismanagement of these funds could result in legal consequences for the escrow holder.
• Financing Details: If the buyer is obtaining a mortgage, the contract should outline the financing terms, including loan type, interest rate, and the timeline for securing financing.
• Payment Schedule: Some transactions may involve structured payments beyond the initial deposit and final closing amount. If any portion of the purchase price will be paid in installments, the contract should specify these terms.

Property Inclusions and Exclusions

A well-drafted purchase agreement in Virginia should clearly define what items are included in the sale. Some items, such as built-in appliances, window treatments, and light fixtures, are often assumed to be part of the home purchase. However, if the buyer or seller intends to include or exclude certain items—such as a refrigerator, washer, dryer, or outdoor fixtures—these should be explicitly listed in the contract to prevent disputes.

Contingencies That Protect Buyers and Sellers

Contingencies are conditions that must be met for the contract to move forward. These clauses allow either party to withdraw from the agreement without penalty under certain circumstances. Common contingencies in a Virginia purchase agreement include:

• Financing Contingency: Protects the buyer by allowing contract cancellation if they cannot secure a mortgage within a specified timeframe.
• Home Inspection Contingency: Allows the buyer to hire a home inspector and negotiate repairs or a price adjustment based on the findings. If the home inspection reveals significant defects, the buyer may have the right to walk away.
• Appraisal Contingency: Seeks to value the property at or above the purchase price. If the home appraises for less than the agreed price, the buyer can renegotiate or withdraw.
• Sale of Current Home Contingency: This contingency gives the buyer time to sell their existing home before purchasing a new one.
• Title Contingency: Confirms that the property’s title is clear of liens or ownership disputes before the sale is finalized.
• Insurance Contingency: Allows the buyer to cancel the contract if they cannot obtain homeowners insurance, which is often required for financing, especially in areas prone to flooding, hurricanes, or wildfires.
• Final Walkthrough Contingency: This gives the buyer the right to complete a final walkthrough before closing to confirm that the property is in the agreed-upon condition and that any required repairs have been completed. If issues arise, the buyer may delay closing or renegotiate.
• Well and Septic System Inspection Contingency: While Virginia law requires sellers to disclose septic system information, this contingency allows the buyer to conduct independent well and septic inspections to confirm they are in working order. If deficiencies are found, the buyer may request repairs or withdraw from the contract.

Clearly defining contingencies with specific deadlines and conditions is crucial for a smooth transaction.

Seller’s Disclosures in Virginia

Unlike some states that require comprehensive seller disclosures, Virginia follows the buyer beware principle, which means the seller is generally not obligated to disclose property defects. However, Virginia law does require certain disclosures. These include:

• Lead-Based Paint Disclosure: If the home was built before 1978, federal law requires sellers to inform buyers of any known presence of lead-based paint and provide related documentation.
• Septic System Disclosure: If the property has a septic system, the seller must disclose its condition and provide any available inspection records. However, this does not guarantee the system is functional, which is why buyers may include a septic inspection contingency in their contract.
• Military Air Installation Disclosure: If the property is near a military airbase, the seller must inform the buyer due to potential noise and environmental concerns.
• Homeowners Association (HOA) Disclosure: If the property is located in an HOA community, the seller must provide information about HOA fees, rules, and any pending assessments. The buyer has the right to review these documents and may be able to withdraw from the contract within a set timeframe if they find the terms unacceptable.

Because Virginia follows a buyer-beware approach, buyers are encouraged to conduct independent inspections to uncover potential property issues. Disclosures only provide required information—they do not replace inspections or eliminate the need for buyer contingencies

Closing Details

Once both parties sign the purchase agreement contract, the transaction moves toward closing—the final step where ownership officially transfers. The contract should specify:

• Closing Date: The agreed-upon date when the transaction will be finalized. In Virginia, simply setting a closing date does not make it enforceable unless the contract includes a “time is of the essence” clause (Sims v. Nidiffer). This clause ensures that deadlines must be strictly met and that failure to close on time could be considered a breach of contract.
• Location of Closing: Typically conducted at a title company, real estate attorney’s office, or escrow agent’s office. In Virginia, the settlement agent—who may be a title company, escrow officer, or attorney—oversees the closing process, ensuring all legal requirements are met.
• Closing Costs: Specifies who is responsible for various costs, including title fees, escrow fees, and transfer taxes. In Virginia, these costs are negotiable, but buyers and sellers should agree on their responsibilities in the contract.
• Title Insurance: While not required by law, title insurance is strongly recommended to protect against title defects or claims. The contract should state whether the buyer or seller is responsible for purchasing the policy.
• Prorated Expenses: Details how property taxes, homeowners association (HOA) dues (if applicable), and utility bills will be split between the buyer and seller based on the closing date. These costs are often prorated to ensure each party pays their fair share for the time they own the property.
• Recording Fees and Transfer Taxes: Clarifies who will pay the costs associated with recording the deed and any applicable transfer taxes. Virginia imposes deed transfer taxes, but the responsibility for payment can be negotiated in the contract.
• Possession Date: Specifies when the buyer will take physical possession of the property. In most cases, possession transfers at closing, but in some agreements, the seller may remain in the home for a set period after closing under a separate agreement.
• Home Warranty: If a home warranty is included as part of the sale, the contract should specify who is responsible for purchasing it and what it covers.
• Surveys and Inspections: If the buyer requests a property survey to confirm boundary lines or additional inspections beyond the standard home inspection, the contract should specify who will pay for them and whether the results could impact the sale.

Including these details in the purchase agreement contract can help avoid last-minute disputes and create a clear, structured path to closing day.

Common Pitfalls to Avoid

Real estate transactions can be complex, and certain pitfalls may arise during the contract process. Here are some common mistakes and ways to prevent them in Virginia real estate contracts:

• Ambiguous Language: Any vague or unclear terms in the contract can lead to disputes. All terms, including deadlines, responsibilities, and conditions, should be clearly defined to prevent misunderstandings.
• Failure to Include Contingencies: Omitting important contingencies—such as financing, inspections, or appraisal clauses—can leave buyers unprotected if issues arise before closing.
• Missed Deadlines: Real estate contracts contain strict timelines for financing approval, inspections, repairs, and closing. Failing to meet these deadlines can delay the transaction or result in contract termination.
• Improper Identification of Parties: The contract should accurately identify all parties involved. If the buyer or seller is an LLC, trust, or other legal entity, the contract must include the full legal name of that entity to avoid enforceability issues.
• Unclear Terms Regarding Personal Property: To avoid disputes after closing, the contract should explicitly state which items—such as appliances, light fixtures, and window treatments—convey with the home.
• Inadequate Earnest Money Deposit: The earnest money deposit serves as a good faith payment to secure the property. In a competitive market, an insufficient deposit may make the buyer’s offer less appealing. However, buyers should also be cautious about committing too much without proper contingencies in place.
• Overlooking Homeowners Association (HOA) Rules and Fees: If the property is located in an HOA community, buyers must review the HOA disclosure packet before proceeding. This includes rules, restrictions, financial obligations, and potential assessments that could impact the buyer’s decision.
• Neglecting Title Insurance: While not legally required in Virginia, title insurance protects buyers from undiscovered liens, ownership disputes, and title defects that could arise after the purchase. Without it, buyers risk financial loss if an issue surfaces.
• Failure to Address Termite and Moisture Inspections: Termite and moisture-related damage is a common issue in Virginia, particularly in older homes. The contract should specify who is responsible for inspections and any necessary treatments or repairs before closing.
• Ignoring the “Time is of the Essence” Clause: Including this clause ensures that deadlines must be strictly followed. Without it, missed deadlines may not automatically result in a breach of contract, potentially delaying closing or causing the deal to fall apart.

Avoiding these common mistakes helps prevent legal disputes, unexpected costs, and transaction delays, making the home-buying process in Virginia smoother for both buyers and sellers.

When Can a Purchase Agreement Be Canceled?

There are specific scenarios in which a purchase agreement can be canceled legally without penalty:

• Failure to Meet Contingencies: If a contingency, such as financing approval or a satisfactory inspection, is not met, the buyer can withdraw without consequences.
• Mutual Agreement: Both parties can agree to cancel the contract in writing.
• Breach of Contract: If one party fails to meet their contractual obligations, the other party may have grounds for termination.
• Legal Issues: Unresolved title defects, zoning violations, or undisclosed property conditions may justify contract termination.

If a contract is canceled, the terms of earnest money refunds or forfeitures should be clearly outlined in the agreement.

The Role of Real Estate Professionals

Although a purchase agreement is a binding legal document, buyers and sellers may not always fully understand its implications. Real estate professionals—such as agents, brokers, and attorneys—play a key role in ensuring the contract reflects both parties’ intentions and complies with Virginia laws.

• Real Estate Agents: Agents assist in drafting, negotiating, and finalizing purchase agreements while ensuring that buyers and sellers understand the terms.
• Attorneys: A legal contract lawyer can review the contract, explain potential risks, and handle legal complexities such as title issues or disputes.
• Title Companies: A title company ensures the property’s title is clear of liens and facilitates the closing process.

While not legally required, involving professionals can provide valuable guidance throughout the transaction.

A purchase agreement contract in Virginia is the backbone of any real estate transaction, ensuring both buyers and sellers are legally protected. By understanding its key elements, legal requirements, and potential pitfalls, you can approach a property purchase with confidence. Whether you’re buying your first home or selling an investment property, a well-drafted contract helps create a clear path to a successful closing.

Need a Contract Lawyer? Consult PJI Law in Fairfax, Virginia

A purchase agreement contract is more than just paperwork—it defines your rights and obligations in a high-stakes transaction. Whether you’re buying or selling property, having a contract lawyer review or draft your agreement can help you avoid costly mistakes and legal disputes. At PJI Law, we review your contract for clarity, enforceability, and alignment with Virginia law. We assist with negotiations, identify potential risks, and address contingencies to protect your investment.

Though this blog focuses on real estate purchase contracts, our legal team also assists with various business and financial agreements. Whether you’re entering a partnership agreement, drafting a promissory note, or reviewing a property lease, we provide tailored legal solutions to safeguard your interests.

If you’re searching for a “real estate attorney near me” who can help with your contract needs, PJI Law is ready to assist. Call (703) 865-6100 or fill out our confidential online form to schedule your consultation today.

At PJI Law, you’ll receive white glove service and personalized attention!

Copyright © 2025. PJI Law, PLC. All rights reserved.

The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country, or other appropriate licensing jurisdiction.

PJI Law, PLC
3900 Jermantown Road, #220
Fairfax, VA 22030
(703) 865-6100
https://pjilaw.com/