The buyer often makes a deposit, known as an earnest money deposit. This "evidence of good faith" is usually in the form of a cash deposit, but it may also be a promissory note (or signed acknowledgment to repay a debt at a later date). The amount can vary and the deposit is usually applied to the down-payment obligation or to the buyer's share of the closing costs.

The importance of the purchase and sale agreement cannot be overstated, and it is advisable to have a lawyer review the document before signing. If this is not possible, a condition can be included to provide that the transaction is subject to the approval of the buyer's (and/or seller's) lawyer within a specified number of days.

A buyer may lose the deposit and be liable for damages if an agreement is signed and he or she fails to abide by its terms. A seller who fails to perform after signing the agreement may also be liable for damages.

A preprinted form is frequently used for purchase and sale agreements, with specific terms added by completing blanks on the form. A specially prepared agreement or addendum may also be used in place of, or to supplement, a preprinted contract.

In addition to naming the parties, price and terms of the purchase, a purchase and sale agreement should also include the following items:

• legal description of the property;
• condition of the title (or legal right to ownership) and assumed debt;
• warranties of title (restrictions, rights or limitations)
• condition of property and of zoning or use rights (if applicable);
• prorations of taxes, special assessments, obligations and prorations regarding insurance premiums
• stipulation of who bears costs for such items as transfer fees, state revenue stamps, etc.;
• financing, if it is a contingency of the purchase;
• complete terms and documents to be used if the seller is supplying financing and receiving security for such financing (with copies of any such documents attached);
• items of furnishings, fixtures or appliances to be included or excluded;
• right of inspection (if any) given the buyer;
• date of possession; and
• conditions under which an offer may be canceled, as well as provisions for return or forfeiture of the deposit.

In the purchase and sale of an existing home, the sellers must complete a disclosure statement regarding the home. Disclosures cover a variety of topics, including the condition of legal title, the availability of essential services to the home such as sewer and water, and a listing of the history of significant repairs or changes in the condition of the house. Unless the buyer waives review of this statement, the seller must deliver a completed statement to the buyer for review within a certain time after the purchase and sale agreement has been signed by both parties. The buyer then may elect to terminate the transaction by giving timely and appropriate notice to the seller. If the buyer does not object, then the disclosures are deemed to be acceptable to the buyer.