Real estate transactions can be complex, filled with specialized terminology and legalese that can overwhelm homeowners and investors. In light of that frustration, it’s typically advised that you retain a real estate attorney to help you navigate the word soup that is real estate contract law.

At its core, a real estate contract when signed— also known as a purchase and sale agreement — is a legally binding document that outlines the terms and conditions of the transaction between the buyer and the seller. That’s a fancy way of saying this document legally protects both the seller and buyer.

If your eyes are already glazing over, don’t fret. Think of this guide as a cheat sheet for the terms and clauses typically found in Connecticut real estate contracts and what you need to know about them. Don’t worry — there won’t be a quiz on Monday. 

Key Terms and Clauses

Contract Validity

Let’s start with contract validity. A real estate contract can fall into three categories: valid, void, or voidable.

When a contract is valid, all parties involved have willingly and knowingly agreed to the terms — it’s a valid contract. Simple, right?

Additionally, something valuable must be exchanged, which is known as consideration. In real estate, this consideration is typically the property itself or a chunk of change.

On the other hand, a contract is considered void when it lacks one or more essential elements required for validity. This could be due to a legal prohibition or the involvement of parties incapable of entering into a contract, like minors.

A voidable contract appears valid but may be deemed unenforceable under certain circumstances. This could occur if one party were coerced or misled into signing the contract, making it possible for them to seek legal remedies to void the agreement.

Property Description

The property description identifies the property being transacted. It typically includes the property’s address and a legal description, providing detailed information that outlines its boundaries. This ensures what you’re buying (or selling) is legitimate.

Price and Terms

This is where the purchase price is stated, along with the terms of the agreement, such as the initial deposit, down payment, financing details, and closing costs. The financing terms can vary significantly, especially if seller financing is involved.

Earnest Money

Earnest money is a deposit the buyer pays the seller as a sign of good faith and commitment to the purchase. It is usually a percentage of the purchase price, ranging from 1% to 10%, depending on the market conditions and the seller’s preference. The earnest money is held by a third party, such as an escrow agent or an attorney, until the closing.

This keeps everyone honest and the deal moving along.


These are conditions that must be met before closing. They protect both parties from unforeseen circumstances that may prevent them from completing the transaction. Some common contingencies in Connecticut real estate contracts are:

  • Financing contingency: This allows the buyer to back out of the contract if they cannot obtain a loan or financing of their choice within a specified time.
  • Inspection contingency: This allows the buyer to inspect the property and request repairs or credits from the seller if they find any defects or issues 
  • Appraisal contingency: The buyer can cancel the contract if the property appraises for less than the agreed-upon purchase price.
  • Title contingency: This allows the buyer to verify that the seller has a clear and marketable title to the property and that no liens, encumbrances, or easements affect its ownership or use.
  • Sale of home contingency: This allows the buyer to make their offer contingent on selling their current home within a specific timeframe.

Contingencies must be clearly stated in writing and agreed upon by both parties. They usually have deadlines for completion and can require written notice of satisfaction or waiver. If a contingency is not met or waived by the deadline, a contract may allow either party to terminate the contract.  It is imperative that you read the terms of the contract and understand the implications of meeting, missing, or waiving a contingency.

Closing Date

This clause specifies when the title and ownership of the property will be transferred from the seller to the buyer. The closing date also often denotes when the buyer can take possession of the property.


Disclosures are statements that inform the buyer about specific facts or conditions that affect the property. In Connecticut, sellers, unless exempt, must legally provide buyers with a Residential Property Condition Report (RPCR). The RPCR covers various aspects of the property’s condition, such as structural components, mechanical systems, environmental hazards, zoning issues, and legal claims.  If this is not provided, then Connecticut state law mandates that the seller pay the buyer five hundred dollars.

The RPCR must be completed honestly and accurately by the seller based on their actual knowledge. The seller is not required to conduct any inspections or investigations to discover unknown defects, but they cannot conceal or misrepresent any known defects. The buyer should review the RPCR carefully and conduct due diligence before making an offer.

In addition to the RPCR, sellers must disclose any lead-based paint in properties built before 1978. This is a federal requirement that applies to all states. Sellers must provide buyers with an EPA-approved pamphlet on lead hazards and a written disclosure form stating whether they know of lead-based paint used on the property.

Default and Remedies

This clause outlines what happens if either party fails to fulfill their obligations under the contract. For instance, if a buyer defaults, they might lose their deposit. If a seller defaults, they might be required to return the deposit and could face additional damages.

Financing Clause

The financing clause outlines the loan amount, the interest rate, the loan term, and the type of loan the buyer intends to obtain for the purchase of the property. 

Title Insurance and Survey

This clause addresses the responsibility for obtaining a title insurance policy and, if necessary, a property survey. Title insurance protects the buyer (and their lender) from potential title issues, while a survey ensures that property boundaries are accurately represented.  It is important to note that in Connecticut, surveys are not required in order to purchase a property or obtain title insurance.  Instead, surveys are optional in Connecticut.

Time is of the Essence Clause

A time is of the essence clause emphasizes the importance of meeting deadlines and ensures that both parties understand the consequences of failing to do so. This clause helps keep the transaction on track and holds both parties accountable for timely performance.  However, this clause can act as a double-edged sword and either help or hinder a party in a transaction.  Make sure to consult an attorney before agreeing to this language.

Homeowner’s Association (HOA) Clause/Planned Unit Development/Condominium Association

If the property is located in a community that is considered to be a planned unit development or part of a homeowner’s association or condo association,  this clause should outline the buyer’s rights, when reviewing the association’s documents, like its bylaws and rules and regulations. This clause ensures that the buyer is aware of the obligations and rules imposed by the association.  Additionally, as it relates to condominiums, the state of Connecticut has specific laws that especially relate to the purchase of a condominium.  Be sure to consult a real estate attorney if buying a home located in these types of communities.

Escalation Clause

An escalation clause is often used in competitive real estate markets. It allows the buyer to increase their offer by a specified amount if another buyer outbids them. This clause helps the buyer remain competitive within their maximum budget.


Closing is the final step of the real estate transaction, where ownership of the property is transferred from the seller to the buyer. In the state of Connecticut, it usually occurs at an attorney’s office within 30 to 60 days after signing the contract. Closing requires that both parties sign various documents, which may include, but are not limited to:

  • Deed: Transfers legal title from the seller to the buyer.
  • Settlement statement: Summarizes all fees involved in the transaction.
  • Mortgage note: Obligates the buyer to repay their loan to their lender.
  • Mortgage deed: Secures their loan with their property as collateral.

The closing costs are typically paid according to the party’s agreement or local custom. They may include:

  • Attorney fees
  • Title search fees
  • Title insurance fees
  • Recording fees
  • Transfer taxes
  • Appraisal fees
  • Inspection fees
  • Loan origination fees
  • Escrow deposits

While legalese tends to overcomplicate things, it’s crucial not to let this intimidate you. Our team has the expertise and knowledge to help you navigate the complexities of Connecticut real estate law, whether buying, selling, refinancing, or considering seller financing. We’ll work with you to guide you through this process without the vocab quiz.

Don’t hesitate to contact us with questions or for personalized advice tailored to your unique circumstances.