What is the main purpose of a sales contract in real estate?

The main purpose of a sales contract in real estate is to outline the terms and conditions of a property sale. This legally binding document serves as a detailed agreement between the buyer and seller, specifying crucial elements such as the purchase price, the property description, financing terms, contingencies, and the timeline for closing. By clearly delineating these details, the sales contract helps to ensure that both parties understand their rights and obligations regarding the transaction.

While verifying a buyer's credit score, conducting a property appraisal, and securing earnest money deposits are important components of the buying and selling process, they are not the primary purpose of a sales contract. Rather, they are associated activities that might occur during the overall transaction but do not define the essence of the agreement between the involved parties. The sales contract fundamentally acts as the framework that binds the transaction and guides the transfer of property from one party to another.