Stage 01Draft offer
The purchase agreement usually begins life as a written offer on a standard form used in that market.
Typical contents include identities, property identification, price, earnest money, financing plan, contingencies, inclusions/exclusions, and a proposed closing date.13 Agents and attorneys generally prepare these on authorized forms — not freeform letters.
Stage 02Negotiation & counteroffers
The seller can accept, reject, or counter. Each counteroffer replaces or modifies prior terms until both sides agree or walk away. Price, closing date, repairs, and contingency length are frequent negotiation points.
Nothing is binding until executed. An unaccepted offer generally does not lock either party into a sale; local contract law and form rules control the details.
Stage 03Execution
Execution means all required parties have signed the final agreed terms (including any addenda). At that point the document is typically treated as a binding purchase contract.2
Earnest money is often due within a short window after acceptance and deposited into escrow. Missing that deposit deadline can create seller remedies under many forms.
Stage 04Due diligence
Between execution and closing, both sides work the contract calendar:
Investigate & finance
Inspections, appraisal, loan underwriting, insurance quotes, HOA review, and contingency decisions.
Disclose & clear
Required disclosures, access for inspections, negotiated repairs, and title clearing items.
Title & escrow
Title search/commitment, escrow instructions, and settlement preparation.
Remove or exercise contingencies
Written notices by deadline — or automatic waiver, depending on the form.
See also: Contingencies explained.
Stage 05Closing
Closing (settlement) is when remaining funds are paid, the deed is delivered, and ownership transfers under local custom — sometimes in person at a title company, sometimes via remote/online closing where permitted.
Earnest money is typically credited on the buyer’s settlement statement toward down payment or closing costs if the sale completes.4 Possession timing (same day vs. post-closing occupancy) should be spelled out in the contract or an addendum.
Listing statusActive → under contract
Once a purchase agreement is signed, MLS and public listing status often change from active to pending / under contract / contingent. That signals to other buyers that a deal is in progress, though backup offers may still be allowed depending on the listing and local rules.
Under contract is not the same as closed. Deals still fall through during due diligence. Until recording/funding completes, ownership has not transferred.