Key Vermont Real Estate Contracts Explained
A plain-language breakdown of the most important documents you'll encounter when buying a home in Vermont. Know what you're signing before you sign it.
1. The Purchase and Sale Contract (P&S)
This is the most important document in the transaction. It is the legally binding agreement between the Buyer and the Seller.
| Section | Simple Summary | Key Action Item |
|---|---|---|
| Agreement of Sale & Purchase | The promise itself. You're agreeing to buy, and the seller agrees to sell. | This is the "handshake." Know the terms before you sign. |
| Total Purchase Price | The full amount you will pay for the property. | Confirm the price and how you'll pay (cash vs. mortgage). |
| Contract Deposit | Also known as Earnest Money. A good-faith deposit made when your offer is accepted, showing you're serious about the purchase. | Understand the amount, and know that if you back out without a valid reason, you may lose this money. |
| Description of Property | The legal identity of the property (address, lot number, boundaries). | Verify the description matches what you believe you are buying, including the exact parcel and acreage. |
| Contingencies | Escape clauses that protect you. These are conditions that must be met for the sale to proceed (e.g., satisfactory inspection, mortgage approval, appraisal). | This is your safety net. Ensure your contract includes the right contingencies for your situation (inspection, financing, etc.). |
| Closing & Possession | Defines when ownership transfers to you and when you can move in. | Coordinate with your lender and mover. Ensure this date works for your schedule. |
| Limitation of Liability | A clause that limits the amount the seller would owe you if they fail to complete the sale. | Understand this clause. In most cases, the remedy is for the buyer to get their deposit back, not to sue the seller for additional damages. |
2. The Buyer Broker Contract
This agreement defines the relationship between you (the Buyer) and your real estate agent/broker.
| Section | Simple Summary | Key Action Item |
|---|---|---|
| Term of Agreement | The length of time you are committed to working with your agent. | Know when it starts and ends. Ask about options if you're unhappy with the relationship. |
| Broker's Duties | What your agent promises to do for you (e.g., help you find properties, negotiate on your behalf, guide you through the process). | Understand the level of service you should expect from your agent. |
| Compensation | How your agent gets paid. This is typically a percentage of the sales price, paid from the proceeds at closing. | Confirm who is responsible for paying this and under what circumstances. |
| Agency Relationship | This formally confirms that the agent is working for you, the Buyer, and owes you a fiduciary duty (loyalty, confidentiality, full disclosure). | Ensure you have clear Buyer Agency so your agent's loyalty is to you. |
3. Personal Property Addendum
An addendum to the P&S that specifies which movable items (not permanently attached) are included in the sale.
| Section | Simple Summary | Key Action Item |
|---|---|---|
| Included Personal Property | A detailed list of items not permanently attached to the home that the seller agrees to leave behind (e.g., washer/dryer, lawn tractor, firewood). | If you want it included in the sale, it MUST be on this list. Walk through the property and specify every item. |
| "As-Is" Condition | The personal property is usually sold without any warranty from the seller. | Inspect the items before closing. Don't expect the seller to fix a broken appliance after the sale. |
4. Property Inspection Contingency
This is your primary protection as a Buyer. It gives you the legal right to have the property professionally inspected before you're locked into the purchase.
| Section | Simple Summary | Key Action Item |
|---|---|---|
| Inspection Deadline | The last date you have to complete your inspections and raise objections. | Mark this date on your calendar. Missing this deadline could mean losing your right to negotiate or exit. |
| Scope of Inspections | What you are allowed to inspect (e.g., general home inspection, septic, well water, radon, pest). | Hire qualified, licensed professionals for each inspection you need. |
| Buyer's Rights | If the inspection reveals a significant, material defect, you have the right to: Request repairs or a price reduction; Or terminate the contract and get your earnest money back. | This is your most important protection. Work with your agent to understand what qualifies as a "material defect." |
| Air & Water Testing Thresholds | Specific standards for well water quality (coliform bacteria, nitrates, lead, arsenic) and indoor air quality (radon levels, typically measured in pCi/L). | Understand Vermont's recommended safety limits and what remediation might cost if levels are too high. |
Have Questions About Your Contracts?
Our team is here to walk you through every document and ensure you understand your rights and obligations.