Maryland Real Estate Contracts: What Every Buyer and Seller Should Know
Comprehensive Maryland real estate contract overview from DK Law Group: essential terms, timelines, and tips for buyers and sellers.
Real estate contracts can be confusing. This guide explains the key terms and legal considerations for buyers and sellers in Maryland.
Whether you're buying your dream home or selling an investment property, a real estate contract is one of the most important documents you'll ever sign. Yet for many Maryland residents, it's also one of the most misunderstood.
This guide will walk you through the essential elements of Maryland real estate contracts, explain your rights and responsibilities, and highlight a few often-overlooked legal details that can impact more than just your current transaction—including your long-term financial and estate plans.
What Is a Real Estate Contract?
A real estate contract is a legally binding agreement between a buyer and seller that outlines the terms of a property sale. In Maryland, these contracts must be in writing and typically include:
The purchase price and financing terms
Property details and condition
Contingencies (inspections, appraisal, financing)
Earnest money deposit terms
Settlement and possession dates
Seller disclosures and legal notices
Most transactions in Maryland use a standardized contract created by the Maryland REALTORS® association or a local board, but additional clauses and custom terms are often added.
Thinking about how you’ll hold title with a co-buyer? Your contract should spell it out. Learn why many partners choose joint tenancy—and the pitfalls to avoid—in our in-depth guide, The Power of Two: Understanding Joint Tenancy in Estate Planning
Need a legal review of your real estate contract? DK Law group has you covered.
Key Terms Buyers and Sellers Should Understand
Even standard forms can contain complex legal language. Here are some of the most important terms to watch for:
1. Contingencies
These clauses allow a party to back out of the deal without penalty if certain conditions aren't met, such as:
Home inspection results
Financing approval
Appraisal value
Sale of the buyer’s current home
Failing to meet a contingency deadline—or misunderstanding what’s required—can lead to legal disputes or loss of deposit.
2. Time Is of the Essence
When this clause is included, every deadline is legally enforceable. Miss a date, and you may be in breach of contract—even if it seems minor.
3. Earnest Money Deposit (EMD)
This is a good-faith deposit made by the buyer to show serious intent. If the deal falls through due to the buyer’s fault, the seller may be entitled to keep the deposit.
Legal Disclosures in Maryland
Maryland law requires certain disclosures from sellers to ensure transparency. These may include:
Lead-based paint disclosures (for homes built before 1978)
Property condition disclosure or disclaimer statements
HOA or condominium documents
Environmental hazards (e.g., radon, mold)
Buyers should review these documents carefully—and sellers should be honest and thorough to avoid future legal issues.
Looking for more ways to keep your financial picture transparent—and tax-efficient? See how strategic lifetime gifts can reduce future estate-tax surprises in our guide, Generosity Pays Off: Smart Gifting Strategies to Minimize Estate Taxes
What Happens If a Contract Falls Through?
If a contract is canceled due to unmet contingencies, deposits are usually refunded. But if one party breaches the contract—say, the buyer backs out without cause or the seller refuses to complete the sale—the non-breaching party may seek:
Specific performance (forcing the deal to go through)
Damages for financial loss
Return or forfeiture of the earnest money deposit
This is where a real estate attorney in Maryland can be crucial. Having legal support early in the transaction can prevent costly outcomes later.
How Real Estate Contracts Tie Into Long-Term Planning
While most people focus on the immediate logistics of buying or selling, real estate contracts can also have long-term implications, especially when it comes to estate planning.
For example:
Purchasing a home jointly with a spouse or relative? You may want to title it in a way that ensures a smooth transfer at death.
Selling inherited property after a loved one’s passing? You may need to clear probate or update deeds before listing.
Buying an investment property or vacation home? A trust might be a smarter ownership vehicle, offering both privacy and probate protection.
These decisions aren't just legal—they're deeply personal, and they impact how your assets are handled in the future.
Want to see how property ownership choices play out during life changes? Explore our guide, The Intersection of Estate Planning and Divorce Law, to learn why smart titling now can prevent costly disputes later.
Final Walkthrough and Settlement in Maryland
Once the contract terms are fulfilled, the process moves to settlement (closing). This is when:
The deed is signed and recorded
The loan is funded (if applicable)
Final payments are made
Keys are handed over
Buyers should also complete a final walkthrough to ensure the property is in the agreed-upon condition. Any last-minute issues—like missing appliances or damage—should be addressed before signing.
Protecting Yourself with the Right Legal Support
While many transactions proceed without major issues, some require more than just a standard form. If you're facing a nontraditional sale, a complex title issue, or a disagreement with the other party, having a legal advocate can save you time, money, and stress.
At DK Law Group, we help buyers, sellers, investors, and families navigate the fine print of Maryland real estate contracts. We also collaborate with estate planners and title professionals to ensure your property fits within your broader financial and legacy goals.
Have questions about your Maryland real estate contract? Contact DK Law Group today.
Final Thoughts: Know Before You Sign
Real estate contracts are more than paperwork—they’re legal commitments that shape one of the most significant financial decisions of your life.
By understanding the language, deadlines, and long-term implications of these agreements, you can move forward with confidence—and set the foundation for a more secure future.
Real Estate Mini Game
Clue: Think of the people who make an offer to purchase a property.