Real Estate Contract: Types, Components and Contract Automation

May 19, 2024



A real estate contract binds two or more parties involved in exchanging, transferring, selling, or purchasing properties. Crafting an ironclad real estate contract requires a thorough understanding of several clauses to ensure that they are binding. 

However, creating these contracts manually is a time-consuming task. Even for experienced legal professionals, processes such as due diligence, creating multiple documents with relevant changes, etc., is time consuming. Any errors here directly affect the contract's life cycle leading to poor client experience.

To solve these issues, document generation tools can help create templates for all kinds of real estate contracts. These templates can streamline the contract lifecycle, making it easier for lawyers, real estate agents, and firms to draft and review accurate templates. 

Furthermore, these tools can automate bulk real estate contract generation, making the process efficient and error-free.

What is a Real Estate Contract? 

A real estate contract is a legally binding document that establishes the terms and conditions of a property transaction. Whether it's for rent, exchange, or purchase, these contracts enforce laws of the local jurisdiction to protect the rights and discharge responsibilities to the buyer and the seller.

A well-drafted contract template that covers all the essential legal components for disposing of or acquiring commercial or residential property is crucial. This should also include real estate partnerships and leasing arrangements.

Components of a Real Estate Contract

The components of real estate contracts vary with regulations and compliance pertaining to local jurisdiction. Here, we list out some of the must-have clauses in a real estate contract. 

Names and contact information of parties

A real estate contract must include all parties' full names and permanent addresses. These details must be validated by an ID proof.

Responsibilities under the laws binding parties involved

A real estate contract must properly explain the responsibilities of a buyer, seller, and real estate agent (if applicable).

For example, it must clearly explain that a seller must disclose accurate information about a property’s condition, issues, etc. On the other hand, a buyer must demonstrate in the contract his ability to meet the financial terms of a contract.

Liability information

A real estate contract must mention the liabilities linked to a property. 

For example, every legal document linked to property transactions must have real estate disclaimers, such as listing details, sales contracts, disclosure forms, etc. Common disclaimers also include buyer’s due diligence and seller’s property verifications.

Description of a property

A property description in a real estate contract identifies a property. It provides relevant information about its zone, land use, encumbrances, survey reports, boundaries, legal accuracy with local recordings, and title examination.

Sale incidental expense

Incidental expenses are minor expenses or additional costs that a seller incurs when selling a real estate property. The expense depends on the property’s location, market conditions, home staging, title insurance, property taxes, etc., and are exclusive of the purchase price.

Financing details and security deposits

A real estate contract's financing details outline the funds and conditions around the purchase. These details include the loan amount, down payment, interest rate, and loan term.

A security deposit is a sum of money stated in a contract that serves as a guarantee from the buyer. Its purpose is to ensure that the seller is compensated if the buyer fails to fulfill their obligations in the transaction.

Cancellation clauses

Buyers can cancel a real estate contract if specified clauses are not met, such as financing, home inspection, title, sale period, and appraisal contingency.

Disclosures related to a property

Property disclosures provide information on the condition of the property, any environmental or legal issues, renovation history, neighborhood details, and materials used. These disclosures promote transparency in real estate contracts.

Purchase price

The purchase price in a real estate contract includes the property's value, negotiations, offers, acceptance, deposit, appraisal for market value, and financing terms.

Closing date

The closing date section marks the day when the ownership of a property is officially handed over to a buyer from a seller. This component covers the contingencies, preparation time, agreement terms on a chosen date, details of closing documents, recoding, funding, etc.


All parties' signatures are crucial to establishing legal validity, consent, identification, authorization, recordkeeping, and enforceability of agreed terms. These signatures can be either physical or electronic.

Types of Real Estate Contract

Real estate contracts are of different types based on property transactions, ownerships, purposes, etc.

Purchase agreement

A real estate purchase contract, or a purchase agreement, is a sale contract between a buyer and a seller of a real estate property. This legal document signifies property transactions outlining party identification, sale conditions, purchase price, financing details, and disclosures related to the property.

Lease agreement

A lease agreement is a legal real estate document between a landlord and a tenant. It outlines the lease's timeline, monetary agreements, termination conditions, and responsibilities. 

Rental agreement

A rent agreement is a real estate contract between a landlord and a tenant for a short rental of a property. In this agreement, both parties agree upon the clauses outlining the use of a rental property, rental period, rent amount, liabilities, etc.

Real estate assignment contract

A real estate assignment contract is a legal document investors use to buy and sell a property for a profit. It includes details such as party identification, responsibilities, financial terms, payment methods, and a specific timeframe.

Land contracts

A land contract is a real estate contract in which the buyer pays the seller in installments without involving a bank or lender. It includes payment terms, responsibilities, property disclosures, cancellation clauses, and parties' identification information.

Power of attorney

A power of attorney authorizes an organization or an individual as an attorney on behalf of another party to carry out real estate transactions. This legal real estate contract outlines the clauses entitling an attorney’s power to conduct property transactions.

Who Prepares Real Estate Contracts?

Real estate contracts are created to preserve the interests of involved parties. Professionals linked to this industry can prepare these legal contracts. These professionals are:

Buyer’s real estate agent

A real estate agent appointed by a buyer can create a real estate contract. If he is not licensed to practice law, the real estate contract is verified by a registered lawyer. 

He just fills in the information related to the parties and property and creates a legal document template under the supervision of an assigned lawyer.

Real estate lawyer

A real estate lawyer prepares and reviews a real estate contract according to the local jurisdiction. A lawyer is entitled to include all the clauses linked to a particular type of real estate contract.

Seller’s agent

An agent appointed by the property owner can also outline a real estate contract template for review. He can assist a lawyer in preparing and reviewing a legal real estate document with party identification information, property information, etc.

Real estate or law firms

A real estate firm or a law firm can draft a real estate contract on behalf of the parties involved. A firm considers the components of a legal contract type and drafts a template.

Disadvantages of Manual Real Estate Contract Creation

Compiling and covering the complex components of a real estate contract manually has certain disadvantages.

Human error

Inconsistent legal document format can cause delays in the real estate transaction process. It can lead to confusion and conflict among parties, particularly when manually entering data such as party identification information, property information, liabilities, contingency clauses, etc.

Additionally, typographical errors, lack of structure, and misinformation can result in unforeseen delays, which can lead to missing renewal dates and a negative brand image for the parties involved.

To overcome these challenges, it is crucial to use a standard legal contract template that ensures accuracy and clarity when creating real estate contracts.

Slow turnaround time

Drafting real estate contracts manually is a time-consuming task. This slow process can prolong the contract cycle and hinder operational efficiency. Therefore, the repetitive manual creation of contracts in every cycle decreases efficiency.

Difficulty in customization

Manually revising and updating multiple versions of real estate documents can create bottlenecks. However, a dynamic contract template with intelligent content blocks can eradicate these issues. These blocks automatically populate with pertinent information and can be easily updated, enabling bulk document generation and saving time.

How to Automate Real Estate Contract Generation Using Docupilot?

Document generation tools like Docupilot can also assist in generating real estate contracts in bulk and integrating with different data sources.

Here is how to craft a dynamic document template for a real estate sale contract online.

Step 1: Create a template in the online document editor

Users can either create a real estate sale contract by copying an existing legal document or make one from scratch.

Step 2: In the template, insert placeholders, smart content blocks, loops, and tables

Users can insert tokens or variables that can retrieve information from a data source, such as Google Forms or a spreadsheet, for an automatic population.  These tokens can automatically populate a Recipient’s Name, email address, Company name, and more.

For example, using tokens in your real estate contract template, you can auto-populate fields like buyer/seller’s personal information, property details, eliminating the need to make changes to information every time a new contract is created.

With conditionals or smart content blocks, users can define specific rules to vary content based on conditional logic.

For example, users can insert clauses related to repairs, upgrades, contingencies, and cancellations in a real estate sales contract to create a dynamic real estate contract template. Based on specific requirements, the specified clauses will be included or excluded in a sales contract.

Tables can be included in rows and columns outlining specific information about a real estate property, such as the property type, area, location, neighborhood, floors, amenities, etc.

Loops are smart content blocks that repeat information, clauses, or anything specified in a real estate contract template.

Step 3: Set a template output format for real estate contract generation

After setting up the smart content blocks for real estate contract components, you can select the desired file output format (PDF, DOCX, etc). The generated contracts will be in the chosen format.

Step 4: Generate real estate contracts with the dynamic template

Docupilot auto populates data onto the template by pulling in data from sources like CSV files or Airtable (by integrating with our native extension), Google Forms, and Clio (via Zapier), allowing you to generate multiple real estate purchase agreements quickly and easily. 

Docupilot offers these 3rd-party integrations for real estate contract generation automation.

  • Cloud database: Airtable, QuickBase, Knack, Smartsheet, and Caspio
  • Process automation: Airtable, Kissflow, and Mailparser
  • Sign: DocuSign, Eversign, DropboxSign, HelloSign, YouSign, etc
  • Storage: Dropbox, Amazon S3, Box, OneDrive, and Google Drive
  • Forms: Google Forms, Autpilot, Device Magic, Cognito Forms, 123FormBuilder, FormDesk, etc
  • Data sources: Podio and Kissflow
  • Payments: Recurly, Chargebee, Braintree, PayPal, etc

Step 5: Select how to deliver the real estate purchase agreement to specific recipients

To automatically send generated contracts, simply choose between Webhook or any email integration option for email delivery. Also, you can utilize DocuSign to enable recipients to easily e-sign the documents.


1. What is real estate contract automation?

Real estate contract automation uses software to create and edit real estate contract templates with smart content blocks. These blocks are auto-populated with integrated third-party apps, allowing for bulk generation of real estate contracts.

2. How can real estate contract automation help me?

Real estate contract automation can help you in the following ways.

  • Save time required to craft a template and generate real estate contracts.
  • Improve efficiency by reducing manual errors related to repetitive contract creation and data entry.
  • Streamline document generation with workflow management.
  • Maintain brand consistency with accurate and updated real estate contract formats.

3. Can I customize real estate contract documents with specific variations?

Yes. You can customize a dynamic real estate contract template with variables, conditionals, tables, and loops with the help of Docupilot’s online template builder.

4. How can I generate real estate contracts complying with legal regulations and industry standards?

Docupilot's online template builder can help you make changes and update real estate contract templates easily. It's a document generation software that creates and edits dynamic templates with local laws, regulations, and industry best practices. The templates can then be used to automate bulk real estate contract generation with Docupilot's integration features.

Docupilot - Automate Your Real Estate Contracts

Creating real estate contracts manually can be time-consuming and affect your productivity. With Docupilot's smart online document editor and integration features, you can create real estate contract templates and save at least an hour for each contract you create digitally. Use our integration options, such as Airtable extension and API support, to streamline your workflow and ensure brand consistency.

Book a demo today, and let us explain how to automate real estate contract generation.

Sign up for a 30-day free trial of our premium plans today.

Did you know?

According to a Thompson Reuters, respondents who use document automation for lease agreements (22%) report that they have time to Leverage workflows to develop new business models with clients and Win new clients with better business development.