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National curriculum lesson · Contracts

Purchase Agreements and Addenda

A purchase agreement should identify the parties and property, price and earnest money, financing, included and excluded items, title and closing terms, possession, contingencies, disclosures, risk allocation, default remedies, notices, dates, and signatures. An addendum supplies additional terms when the contract is formed; an amendment changes an existing agreement with required consent.

Facts checked against the current PSI Candidate Information Bulletin and GREC sources. Editorial standards.

What is the exam-ready answer?

A purchase agreement should identify the parties and property, price and earnest money, financing, included and excluded items, title and closing terms, possession, contingencies, disclosures, risk allocation, default remedies, notices, dates, and signatures. An addendum supplies additional terms when the contract is formed; an amendment changes an existing agreement with required consent.
Official syllabus mapping for Purchase Agreements and Addenda
Official syllabus topicPurchase Agreements and Addenda
Official PSI areaContracts
Published area weight19% of the 100-question national portion
Exam portionNational salesperson portion
Source editionPSI Georgia Candidate Information Bulletin dated July 1, 2026

The Rule

PSI publishes the weight for the complete content area, not a fixed question count for this lesson. Learn the rule well enough to apply it when PSI changes names, numbers, or parties in a new scenario.

The lesson

These ideas work together. On the exam, the wrong answers usually describe a nearby concept, so learn where each one stops.

Essential transaction terms

Identity, legal property description, consideration, and mutual obligations must be definite enough for the intended agreement. Dates and delivery rules turn expectations into measurable duties.

Contingencies

Financing, appraisal, inspection, due diligence, title, sale-of-other-property, or other contingencies should state deadline, standard, notice method, and consequence.

Closing and risk allocation

The contract addresses prorations, costs, title evidence, casualty risk, possession, deed form, and documents required at closing.

Addenda and amendments

An addendum is incorporated additional content. An amendment modifies the existing agreement and ordinarily requires assent from affected parties; a counteroffer occurs before formation.

Decision rule

For every clause, identify who must do what, by when, using which notice, and what happens if it does not occur.

Georgia-specific distinction

Georgia brokerage transactions commonly use detailed association forms, but the signed documents control. A Georgia licensee must present offers promptly, avoid unauthorized legal drafting, and use written amendments for negotiated changes.

Worked example

Scenario. After binding agreement, Buyer and Seller agree to move closing by seven days.

Reason it through. A contract already exists and one of its terms is changing by mutual consent.

Answer. Document the change in a signed amendment, not a counteroffer.

Common exam traps

  • Using an amendment before contract formation
  • Leaving contingency consequences unstated
  • Relying on oral side agreements
  • Ignoring included fixtures and personal property

Original practice questions with detailed explanations

These questions were written for instruction and mapped to the current outline. They are not copied from PSI or any live examination. Choose an answer before opening the explanation.

Question 1

After the purchase contract is binding, the buyer and seller agree to move closing back seven days. How should the change be documented?

  1. A. A counteroffer to the seller
  2. B. A new addendum to the offer
  3. C. A verbal agreement between agents
  4. D. A written amendment signed by both
Show answer and explanation →

Answer: D. A written amendment signed by both

An amendment changes a contract that already exists, with the assent of the parties. A counteroffer is the common mistake, but counteroffers happen before a contract forms, not after.

Question 2

A buyer's inspection contingency says only "subject to a satisfactory inspection." What is the biggest gap in that clause?

  1. A. It states no deadline, notice method, or result
  2. B. It does not name the inspector's license number
  3. C. It should appear in an addendum instead
  4. D. It lets the seller choose the inspector
Show answer and explanation →

Answer: A. It states no deadline, notice method, or result

A workable contingency says who must act, by when, how notice is given, and what happens if the condition fails. Moving it to an addendum is wrong because where the clause sits does not fix missing terms.

Question 3

A seller plans to take a wall-mounted TV and the dining room chandelier, while the buyer assumes both stay. What best prevents this dispute?

  1. A. Relying on the listing photos
  2. B. Agreeing orally at the walk-through
  3. C. Listing each item in the signed contract
  4. D. Letting the closing attorney decide
Show answer and explanation →

Answer: C. Listing each item in the signed contract

The purchase agreement should state which fixtures and personal items stay or go, so each party's duty is clear before closing. Settling it at the walk-through is wrong because by then an oral side deal is hard to prove and the signed contract controls.

Ready to move on?

You are ready for the next lesson when all of these are true.

  • Explain Purchase Agreements and Addenda in one clear answer without notes.
  • Separate Essential transaction terms from Contingencies using a fresh example.
  • Apply the decision rule to a new fact pattern and name the fact that controls the result.
  • State the Georgia-specific point or explain why the national rule applies unchanged.
  • Answer every practice question and explain the rule each rejected option misapplies.
  • Revisit this topic later in mixed practice without category labels.

Recommended next lesson

Continue with Leases and Leasehold Estates. A lease is the other contract you will see most often, and the next lesson covers the leasehold estates, the terms a lease should state, and how an assignment differs from a sublease.

Return to the Contracts hub to see every official branch and the complete lesson sequence for this content area.

Purchase Agreements and Addenda questions

Facts checked against the current PSI Candidate Information Bulletin and GREC sources. Editorial standards.

Is Purchase Agreements and Addenda on the Georgia real estate exam?

Yes. It belongs to PSI's Contracts content area, which is 19% of the 100-question national portion. PSI publishes content-area weights, not a guaranteed question count for this individual lesson.

What is the main rule for Purchase Agreements and Addenda?

For every clause, identify who must do what, by when, using which notice, and what happens if it does not occur.

What Georgia-specific distinction should I remember?

Georgia brokerage transactions commonly use detailed association forms, but the signed documents control. A Georgia licensee must present offers promptly, avoid unauthorized legal drafting, and use written amendments for negotiated changes.