A written proposal is the foundation of a real estate transaction. Oral promises are not legally enforceable when it comes to the sale of real estate. Therefore, you need to enter into a written contract, which starts with the written proposal. This proposal not only specifies price, but also all the terms and conditions of the purchase. As a Realtor in the state of meet a beautiful russian girl, I have a standard promulgated purchase agreement I will write for you, which is a legally binding offer that reflects the price as well as terms and conditions that are right for you. I will guide you through the offer, counteroffer, negotiating and closing process.
After the offer is drawn up and signed, I will present it to the seller’s real estate agent. The purchase offer I submit, if accepted as it stands, will become a binding sales contract (aka: purchase agreement, earnest money agreement, or deposit receipt). So it’s important that the purchase offer contains all the items that will serve as a “blueprint for the final sale.” The purchase offer includes items such as:
- address and the legal description of the property
- sale price
- terms: for example, all cash or subject to you obtaining a mortgage for a given amount
- seller’s promise to provide clear title (ownership)
- closing date
- amount of earnest money deposit accompanying the offer, whether it’s a check, cash or proomissory 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 payments are to be adjusted (prorated) between buyer and seller
- provisions about who will pay for title insurance, surveys, termite inspections, etc.
- type of deed to be given
- walk through provisions
- a time limit after which the offer will expire
- contingencies, which are an extremely important matter and that are discussed below
Contingencies – “Subject to” Clauses
If your offer says “this offer is contingent upon (or subject to) a certain event,” you’re saying that you will only go through with the purchase if that event occurs. Here are two common contingencies contained in a purchase offer:
- 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 the home inspector: for example, “within 10 days after acceptance of the offer.” The seller must wait 10 days to see if the inspector submits a report that satisfies the buyer. If not, the contract would become void. Again, make sure that all the details are explicitly stated in the written contract.
This is a deposit that you give when making an offer on a house. A seller is understandably suspicious of a written offer that is not accompanied by a cash deposit to show “good faith.” This will become part of your down payment.
Buyers: the Seller’s Response to your Offer
You will have a binding contract if the seller, upon reviewing your written offer, signs an acceptance just as it stands, unconditionally. The offer becomes a firm contract as soon as you are notified of acceptance. If the offer is rejected, it’s over. The seller cannot later change their minds and hold you to it. If the seller likes everything except one or two conditions, you may receive a written counteroffer including the changes the seller prefers. You are then free to accept it, reject it, or even make your own counteroffer. Each time either party makes any change in the terms, the other side is free to accept, reject, or counter again. I will communicate to you the seller’s response and, if necessary, suggest further negotiating options. The document becomes a binding contract only when one party finally signs an unconditional acceptance of the other side’s proposal.