In the spirit of motivating buyers to submit offers, I thought it might be helpful to share what exactly goes into an offer…so that you can make an offer…today…because time is running out! (I hope I’m making myself clear).
Your Realtor® will help you understand the terms and conditions of the sale and plan a strategy for achieving an accepted offer. Sometimes this process involves an initial offer and several counter offers. Oral promises are not legally enforceable when it comes to the sale of real estate so every offer is presented in a formal written contract. This contract specifies price and all the terms and conditions of the purchase. For example, if the sellers said they’d contribute $2,000 toward your closing costs, be sure that is included in your written offer and in the final completed contract, or you will not have grounds to collect it later. After the offer is drawn up and signed, it will be presented to the seller agent by your Bella Casa Realtor® .
What the Offer Contains
The offer you submit, if accepted as it stands, will become a binding sales contract (known in some areas as a purchase agreement, earnest money agreement or deposit receipt). It’s important, therefore, that it contains all the items that will serve as a “blueprint for the final sale.” Items may include such things as:
- Address and sometimes a legal description of the property
- Sale price
- Terms — for example, all cash or subject to your obtaining a mortgage for a given amount
- Seller’s promise to provide clear title (ownership)
- Target date for closing (the actual sale)
- Amount of earnest money deposit accompanying the offer, and whether it’s a check, cash or promissory note, and how it’s to be returned to you if the offer is rejected — or kept as damages if you later back out for no good reason
- Method by which real estate taxes, rents, fuel, water bills and utilities are to be adjusted (prorated) between buyer and seller
- Provisions about who will pay for title insurance, survey, termite inspections and the like
- Type of deed to be given
- Other requirements specific to your state, which might include a chance for attorney review of the contract, disclosure of specific environmental hazards or other state-specific clauses
- A provision that the buyer may make a last-minute walk-through inspection of the property just before the closing
- A time limit (preferably short) after which the offer will expire
- Contingencies, which are an extremely important matter and are discussed in detail below.
- The buyer obtaining specific financing from a lending institution. If the loan can’t be found, the buyer won’t be bound by the contract.
- A satisfactory report by a home inspector “within 10 days (for example) after acceptance of the offer.” The seller must wait 10 days to see if the inspector submits a report that satisfies you. If not, the contract would become void.
- The sale is dependent on the buyer selling his current home.
- The Realtor® representing the seller will open escrow with a copy of the Earnest Money Agreement. The title company will begin producing a Preliminary Title Report.
- Copies of the Earnest Money Agreement will be given to the buyer’s mortgage broker to begin the loan process immediately (a contractual requirement).
- Earnest money offered by a promissory note must be deposited by the due date, or you risk losing the property and your earnest money.
- The buyer hires a home inspector and notifies an insurance agent to obtain homeowner’s coverage.
*This could be you, but only if you make an offer before the tax credit expires on April 30th. Otherwise you won’t be quite as happy as these people.