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

A one to four family residential contract between family members is a specialized real estate purchase agreement that governs the sale of a residential property (a home with one to four dwelling units) between relatives 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 legal structuring to stay compliant with federal and state regulations.

What is a one to four family residential contract?

It's a written agreement that records the sale of a one-to-four unit residential property from one party 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 in a standard resale between a buyer and seller. Other states use similarly scoped residential purchase agreements. When the buyer and seller are relatives, this template adapts that same residential resale structure to handle gift equity, installment payments, and family financing while keeping the contract enforceable.

Do you need a broker or agent?

A family sale often skips the open-market process, so many relatives buy and sell without a real estate broker or agent and pay no commission. That's allowed in most states. If you do work with a broker, their commission and any 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 additional terms (a survey requirement, an as-is condition, a financing period) belong there. Keep a written record of every version 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 or selling residential real estate to a family member, regardless of the sale price or payment structure. Family transactions must still comply with the Truth in Lending Act (TILA), Real Estate Settlement Procedures Act (RESPA), and your state's Statute of Frauds, which requires written contracts for real estate sales. Even if you're selling to your child at a discount or accepting installment payments from a sibling, proper documentation protects both parties and meets legal standards. It's essential 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 one to four family residential contract example include?

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

• The names of the parties (the individual buyer and seller) and their family relationship where relevant.
• A legal description of the residential property that meets local recording standards, not an informal label like "the family house".
• The sale price, plus any gift equity or below-market adjustment and how it's documented.
• Payment terms, including whether the sale is all-cash, financed by a lender, or carried by the seller through installments.
• Closing date, possession terms, and how property taxes are prorated.
• A survey requirement and how any boundary or title issues are resolved before closing.
• Any broker or agent details and commission, where a real estate company is involved.
• Disclosures required by state law and the recording and notarization steps that finalize the transfer.

Because this template 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.

Key legal considerations

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

Legal requirements in the United States

Under United States law, your family residential contract must satisfy the Statute of Frauds in your state, which requires written real estate contracts signed by both 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 requirements. You'll need to comply with state-specific disclosure laws, which may require revealing known property defects even in family transactions. The agreement must be recorded per state recording statutes to give notice to third parties and protect the buyer's ownership rights. Many states require 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 requirements under TILA and RESPA, even in a family sale.