What is the main purpose of a real estate contract?

The main purpose of a real estate contract is to establish the conditions for buying or leasing property. Such contracts clearly lay out the specifics of the transaction, including crucial elements such as the purchase price, property description, financing details, and timelines for performance. This clarity is vital for both parties involved, as it ensures that everyone understands their rights and obligations throughout the process.

While outlining property management terms can be a component of some contracts or agreements, it is not the primary goal of a real estate contract focused on a transaction. Similarly, setting a market price is influenced by market conditions and negotiations, but the contract itself does not dictate the price; rather, it records the agreed-upon terms between the buyer and seller. Lastly, while real estate regulations and laws provide the framework for transactions, the contract specifically serves to formalize the agreement between the parties, making option two the most accurate choice.