Sounds like a silly question but for contracts, does it make you look any less professional to use letter size paper for your contracts rather than legal size?

No.  The Florida Bar Purchase Contracts and Addenda are all regular letter size now; it's a heck of a lot easier to scan for saving and sending to others.  Your question proved to be a very sensible one!

The Oklahoma Real Estate Commission sales contracts are letter as well. 

@Patricia Steiner and @Clay O. Thank you both!