Ace the Minnesota Real Estate Exam 2025 – Unleash Your Property Powerhouse!

The purchase agreement is the document that formally initiates a real estate sales transaction. This agreement constitutes a legally binding contract between the buyer and the seller that outlines the terms and conditions of the sale, including the purchase price, financing details, and contingencies that must be met before the transaction can be completed.

When both parties sign the purchase agreement, it indicates their mutual consent to proceed with the sale, thereby marking the beginning of the transaction process. This document also provides the framework within which both parties will operate, establishing timelines for various obligations leading to the closing of the sale.

In contrast, while a listing agreement is important as it establishes the relationship between the seller and the real estate agent, it does not initiate the sale itself. A closing statement summarizes the final financial transactions when the sale is completed, and a mortgage application is a request for financing to purchase the property, which is separate from the actual sale agreement.