Purchase price
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Definition
The purchase price is the amount the buyer and seller agree for the home in the contract. It is not the appraisal opinion and not the loan amount.
In plain English
The contract states what the buyer will pay for the property. The mortgage may finance only part of that price. An appraisal may support a different value. Down payment math starts from the purchase price. LTV math may use the lesser of price and appraised value, depending on the loan. Those uses do not merge the three ideas.
Technical definition
Consumer glossaries treat purchase price as the agreed price of the home. It remains distinct from a property appraisal.
Why it matters
Disclosures, down payment, and LTV all need a stable name for the contract price.
Related terms
Commonly confused with
Sources reviewed
Glossary of key terms
Source reviewedSeptember 4, 2026
Mortgage key terms
Source reviewedSeptember 4, 2026
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