The Indiana purchase agreement, clause by clause

When two people agree on a house without a brokerage, the purchase agreement stops being a form somebody else fills in and becomes the whole deal. Indiana’s statute of frauds (IC 32-21-1-1) means a contract for the sale of land has to be in writing and signed by the party it will be enforced against, so a handshake on a porch in Mishawaka binds nobody. What follows is the anatomy of a residential agreement — what each clause does, what Indiana law adds, and where direct buyers and sellers most often leave a gap. It is a map, not legal advice; for anything unusual, have an Indiana real-estate attorney review the draft. The Michigan version differs in important ways and has its own guide: the Michigan purchase agreement.

1. Parties, property and price

Name every titled owner as seller, and every person who will take title as buyer. Describe the property by street address and by the legal description or parcel number from the county record — the address alone has sunk more than one closing where a lot line or a second parcel was involved. State the price, and list what is included beyond the structure: appliances, window treatments, a shed, a dock, a generator. Anything not written is up for argument on closing day.

2. Earnest money

Earnest money is the buyer’s good-faith deposit. Indiana does not set an amount by statute, so the agreement must do the work. Spell out four things: how much, who holds it (a title company is the common neutral choice in a direct deal — never the seller’s personal account), when it is due after acceptance, and exactly when it is refundable and when it is forfeited. The refund rules should mirror the contingencies below, clause by clause. The offer guide covers sizing a deposit for the market you are in; in Goshen, where the median listing went under contract in 8 days through June 2026 (market report), a thin deposit reads as a thin commitment.

3. Financing and appraisal contingencies

A financing contingency lets the buyer out, with the deposit returned, if the loan is denied despite a good-faith application. Name the loan type, the maximum rate the buyer will accept, the date by which the buyer must apply, and a commitment deadline. Sellers should ask for a pre-approval letter with the offer.

An appraisal contingency is separate: it addresses what happens if the lender’s appraisal comes in under the price. The usual options are a price reduction, the buyer covering the gap in cash, a split, or termination. Deciding that in advance is far easier than deciding it under deadline, and the low-appraisal guide runs the numbers. A cash buyer can drop both clauses, which is a real advantage in a competitive offer.

4. The inspection contingency

This clause gives the buyer a fixed window — commonly a week to ten days — to inspect and then respond: accept the house, ask for repairs or a credit, or terminate. Write in who orders and pays for inspections, which specialized tests are allowed (radon, well water, septic, sewer scope), the response deadline, and what happens if the parties cannot agree on repairs. Credits are cleaner than repairs in a direct sale, because nobody has to judge the seller’s contractor. See inspections in Michiana and the evaluation checklist.

5. The seller’s disclosure: before acceptance, not before closing

Indiana’s disclosure statute (IC 32-21-5) is the clause most direct sellers get wrong on timing. For homes with one to four units, the owner must complete and sign the state’s Seller’s Residential Real Estate Sales Disclosure (State Form 46234) and give it to the buyer before an offer is accepted. Until both parties have signed it, an accepted offer is not enforceable against the buyer.

The form covers the known condition of the foundation, mechanical systems, roof, structure, water and sewer systems, additions that may need sewage-system improvements, known contamination from manufacturing a controlled substance, and nearby airports. It is a statement of the owner’s actual knowledge, not a warranty, and it is no substitute for an inspection. If the condition changes before closing, the seller must disclose it or certify at settlement that the house is substantially the same. Court-ordered transfers such as estates and foreclosures, transfers between co-owners or to a spouse or lineal relatives, and first sales of never-occupied new homes are among the exemptions. The disclosure guide covers filling it out well.

6. Federal and association add-ons

Lead-based paint for homes built before 1978

Federal rules require the seller of pre-1978 housing to give the buyer the EPA pamphlet on lead hazards, disclose any known lead-based paint and hand over available reports, include a Lead Warning Statement in the contract, and offer the buyer a 10-day period to test. The seller keeps the signed disclosure for three years. Pre-1978 houses are common in South Bend and Elkhart, and the rule applies to by-owner sales exactly as it does to brokered ones.

Homeowners association documents

If the house is in an HOA, Indiana requires the seller to provide, at least 10 days before closing, a disclosure that the property is governed by an association, the recorded governing documents, a statement of any assessments, and contact details for the board or manager (IC 32-21-5-8.5). Build that date into the timeline.

7. Property taxes: the arrears proration

Indiana pays property taxes a year behind: taxes assessed for a year are due in two equal installments on May 10 and November 10 of the following year (IC 6-1.1-22-9). On closing day, the seller has lived in the house for months that have not been billed yet, so the agreement should say the seller credits the buyer for taxes accrued through the closing date, and on what basis — usually the most recent bill. Late-year closings can involve most of two tax periods. Indiana closing costs walks through the arithmetic. Two related filings belong in the agreement or the closing checklist: the sales disclosure form, which both parties sign and file with the county for a $20 fee, and the buyer’s homestead deduction, which that same form can apply for if filed by January 15.

8. Title, closing and possession

Name the title company, the type of deed the seller will deliver, who pays for the owner’s title policy (by Indiana custom, usually the seller), and a closing date. Possession deserves its own sentence: at closing, or a set number of days after, with a daily occupancy charge and a holdback from the seller’s proceeds if the seller stays on. State the condition at possession — broom clean, all personal property removed, systems working as at inspection — and allow a final walk-through. The title company handles the settlement statement and recording identically with or without agents; see closing direct.

9. How the dates fit together

An Indiana agreement is really a calendar with a price attached. A typical direct sale runs in this order, and every step should have a date in the contract rather than a phrase like as soon as practical:

1. The seller delivers the signed disclosure form, and the lead-paint disclosure if the house predates 1978.
2. The buyer makes a written offer; the seller accepts, counters or lets it expire at the stated deadline.
3. Earnest money goes to the named holder within the agreed number of days.
4. The inspection window opens; the buyer applies for the loan and the lender orders the appraisal.
5. The inspection response and any repair or credit agreement are signed as a written amendment.
6. HOA documents arrive at least 10 days before closing; the title company issues its commitment.
7. Final walk-through, then closing, then possession on the agreed date.

Any change after acceptance — a new closing date, a credit, a repair — goes in a signed amendment. Verbal side agreements are exactly what the statute of frauds makes unenforceable.

10. The clauses people forget

Default and remedies: what happens to the deposit if either side walks without a contractual right. Risk of loss: who bears a fire or storm between signing and closing. Time is of the essence: whether deadlines are firm. Notice: how and where each side delivers a termination or repair request, and whether email counts. Acceptance deadline: when the offer expires. A direct deal lives or dies on these dull paragraphs, and the MichianaRealty.com™ sell-direct and buy-direct pages list them as a pre-signing checklist.

Frequently asked questions

Does a real estate purchase agreement have to be in writing in Indiana?

Yes. Indiana’s statute of frauds bars an action on a contract for the sale of land unless the agreement, or a memorandum of it, is in writing and signed by the party against whom it is enforced. A verbal agreement to buy or sell a house cannot be enforced.

When does an Indiana seller have to give the disclosure form?

Before an offer is accepted. Indiana law requires the owner of a one-to-four unit home to complete, sign and deliver the Seller’s Residential Real Estate Sales Disclosure before accepting an offer, and an accepted offer is not enforceable against the buyer until both have signed it. Some transfers, such as estate sales and foreclosures, are exempt.

How are property taxes prorated at closing in Indiana?

Indiana taxes are paid a year in arrears, in installments due May 10 and November 10 of the year after the assessment. At closing the seller usually credits the buyer for taxes that have accrued but not yet been billed through the closing date, often based on the most recent tax bill. The agreement should state the method.

How much earnest money is typical in Indiana?

Indiana law does not set an amount, so it is whatever the parties agree. What matters more is the agreement’s wording: who holds the deposit, when it is due, and precisely when it is refundable under the financing, appraisal and inspection contingencies versus when the seller keeps it.