Simple Real Estate Purchase Agreement Between Family Members Template for the United States

A simple home purchase agreement between relatives is a residential real estate purchase agreement that governs the sale or shared ownership of a home (one to four dwelling units) between family members in the United States. Unlike a standard resale between strangers on the open market, family sales often involve below-market pricing, flexible payment terms, and tax implications that need careful structuring to stay compliant with federal and state regulations. You can still use the same core terms a market sale relies on, including an earnest money deposit and an inspection contingency, so the agreement reads as a familiar home purchase contract that happens to be between relatives.

What is a simple home purchase agreement sample?

It's a written agreement that records the transfer or shared ownership of a one-to-four unit residential property from one relative to another. The "one to four family" label refers to the property type: a single-family house, a duplex, a triplex, or a fourplex used for residential rather than commercial business purposes. In Texas, for example, the standard promulgated form is titled the "One to Four Family Residential Contract (Resale)", published by the Texas Real Estate Commission (TREC) for use between a buyer and seller. Other states use similarly scoped residential purchase agreements. When the parties are related, this sample adapts that same residential resale structure to record each owner's share and financial interest, handle gift equity, installment payments, and family financing, and keep the contract enforceable.

How do you set out ownership shares between family members?

Where relatives buy or hold the home together rather than one buying out the other, the agreement works as a co-ownership agreement that states each owner's percentage interest and how that interest was funded. Record each party's contribution as cash contributed, a loan carried by one party, or gift equity. Spell out how ongoing costs are split, who has the right to occupy the home, and what happens if one owner wants to sell or transfer their share later. Recording who paid what protects each person's financial interest and reduces the risk of a conflict down the line. Keep the ownership split consistent with how title is held on the deed, since the deed is what a title search will show to a lender or future buyer.

What is earnest money in a home purchase agreement?

Earnest money is a deposit the buyer puts down to show they're serious about the purchase. In a market sale it typically sits in escrow and counts toward the price at closing. Family sales sometimes waive it, but including an earnest money deposit can still make sense when one relative is buying from another at arm's length, because it gives the seller a clear signal of commitment and sets out what happens to the money if the buyer walks away. State the deposit amount, who holds it, and the conditions under which it's refunded, so the earnest money terms are the same written record both sides can rely on.

What contingencies should the agreement include?

A contingency is a condition that has to be met before the sale goes ahead. The most common is an inspection contingency, which lets the buyer have the home inspected and back out or renegotiate if serious defects turn up. Other contingencies cover financing (the buyer securing a loan) and title (a clean title search). Even in a family sale, an inspection contingency gives the buyer a defined window to assess the home's condition, and it protects both parties by putting the review process in writing rather than relying on an informal understanding between relatives.

Can you cancel a home purchase agreement?

Yes, within limits the agreement sets out. A buyer can usually cancel without penalty while a contingency period is still open, for example if an inspection turns up a defect or financing falls through, and the contract should state whether the earnest money is returned when that happens. Once every contingency is satisfied or waived, canceling becomes harder and may cost the buyer the deposit. Write the cancellation terms into the document so both relatives know the last date to back out and what each party keeps or returns.

Do you need a real estate agent or broker?

A family sale often skips the open-market process, so many relatives buy and sell without a real estate agent or broker and pay no commission. That's allowed in most states. If you do work with a real estate agent, their commission and duties get set out in a separate listing or representation agreement, not in the purchase contract itself. Where the parties want to change a promulgated form like the TREC One to Four Family Residential Contract (Resale), they attach a signed addendum rather than editing the body of the form, and any extra terms (a survey, an as-is condition, a financing period) belong there. Keep a written record of every version, update it whenever terms change, and share it by email so both sides have the same document.

When do you need this document?

You need this agreement whenever you're buying, selling, or sharing residential real estate with a family member, regardless of the sale price or ownership structure. Family transactions must still comply with the Truth in Lending Act (TILA), the Real Estate Settlement Procedures Act (RESPA), and your state's Statute of Frauds, which calls for written contracts for real estate sales. Even if you're selling to your child at a discount, accepting installment payments from a sibling, or co-owning with a parent, proper documentation protects everyone involved and meets legal standards. It's useful when parents transfer property to children, siblings buy each other out of inherited property, or extended family members handle a residential transfer between themselves.

What does a simple home purchase agreement include?

A typical example of this contract sets out the following core terms:

• The names of the parties (the individual buyer, seller, or co-owners) and their family relationship where relevant.
• Each owner's share, contribution, and financial interest in the property, where ownership is held jointly.
• A legal description of the residential property that meets local recording standards, not an informal label like "the family house".
• The sale price or offer, plus any gift equity or below-market adjustment and how it's documented.
• Any earnest money deposit, who holds it, and the conditions for its return.
• Payment terms, including whether the sale is all-cash, financed by a lender, or carried by the seller through installments.
• An inspection contingency and any financing or title contingency the parties agree on.
• Closing date, possession terms, and how property taxes are prorated.
• A survey requirement and how any boundary or title issues found in a title search are resolved before closing.
• Any real estate agent or broker details and commission, where a real estate company is involved.
• Disclosures called for by state law and the recording and notarization steps that finalize the transfer.

Because this sample mirrors the structure of a residential resale contract, you can use it as a starting point whether the home is a single-family house or a small one-to-four unit building. If you plan to rent any of the units, pair it with a lease agreement for the tenants.

How does gift equity and a below-market sale work?

Selling a home to a relative below fair market value can create gift equity, the difference between the market value and the price actually paid. Under the Internal Revenue Code, that difference may be treated as a gift for federal gift tax reporting, which can affect both parties. Documenting the market value, the agreed price, and the gift equity in writing gives everyone the same information and helps the transaction stand up to IRS review. Record the numbers precisely rather than relying on an informal understanding between family members.

Key legal considerations

Family real estate transactions carry tax implications under the Internal Revenue Code that you should address upfront. When selling below fair market value, the difference may be reported as a gift, potentially affecting both parties' tax obligations. Document the purchase price and ensure it reflects legitimate market considerations. The agreement should include comprehensive property descriptions meeting state recording standards, clear payment terms that comply with federal lending regulations, and proper disclosure statements called for by state law. Address title insurance, since family transactions can present title risks standard policies don't cover, and include provisions for missed installments, tax handling during any payment period, how a conflict between owners is resolved, and the effect on other family members' inheritance rights.

Legal requirements in the United States

Under United States law, your simple home purchase agreement must satisfy the Statute of Frauds in your state, which calls for written real estate contracts signed by the parties. The document must include a legal property description that meets local recording standards, as informal descriptions like "the family house" won't satisfy legal standards. You'll need to comply with state-specific disclosure laws, which may require revealing known property defects even in family transactions. The agreement should be recorded per state recording statutes to give notice to third parties and protect each owner's ownership rights. Many states call for notarization, and some mandate specific language on mineral rights, water rights, or environmental hazards. If the transaction involves seller financing, you may need to satisfy federal lending disclosure obligations under TILA and RESPA, even in a family sale.

Why put it in writing before a partner or relative moves in?

An important reason to sign this before money changes hands is that a written record settles who owns what and how a future sale or buyout runs, which is far harder to reconstruct once a partner or family member has already contributed funds or moved in. A precise document tells each owner exactly where they stand and gives everyone the same terms to point back to if a conflict comes up. GenieAI drafts the agreement, flags risk against your terms, and delivers a ready-to-sign document, so you can capture the deal accurately without building a home purchase contract from scratch.

How to find and complete the agreement online

You can find and complete this agreement online, filling in the parties, the property, and the price directly rather than retyping a template into a word processor. GenieAI drafts the full document, flags any risk against your terms, and delivers a version you can download, edit, and share by email. Before you enter any personal or financial details, read the privacy policy so you know how your information is handled, and reach out through the contact page if a term in your family sale needs adjusting.