Purchasing a second-hand home without a purchase agreement is generally inadvisable in the United States due to legal and financial risks. A purchase agreement, or sales contract, is a legally binding document that outlines terms such as price, payment timelines, inspection rights, and contingencies. Without it, buyers and sellers lack enforceable terms, increasing the likelihood of disputes. To proceed without a formal agreement, buyers must rely on verbal promises or informal arrangements, which are difficult to prove in court. Alternatively, some states allow transactions through alternative methods like land contracts or lease-to-own agreements, but these still involve written contracts. Cash purchases or purchases at public auctions may bypass traditional agreements but require strict adherence to state-specific procedures.

The primary reason to avoid purchasing without a purchase agreement is the absence of legal protection. In the U.S., 98% of residential real estate transactions use a written contract, according to the National Association of Realtors (NAR). Without one, buyers risk losing financial investments if sellers backing out or properties have hidden defects. For example, a 2021 study by the American Bar Association found that 72% of real estate disputes without contracts involved payment disputes or property condition issues. Additionally, lenders typically require a purchase agreement to secure mortgages, as it guarantees the buyer’s rights. States like Texas and California mandate written contracts for most transactions, with penalties for non-compliance. Thus, while informal agreements might occur, they expose buyers to significant legal and financial vulnerabilities, making a purchase agreement essential for compliance and risk mitigation.