“I’ll take it!” Is it as easy as that when you find a house that you really want? Well, nothing is as easy as that! Oral agreements are not enforceable in buying or selling real estate. So when you get ready to get something that makes it official that you’re buying the house- it all starts with the offer- a written proposal that spells out all of the terms and conditions that both parties agree to. An offer only becomes a contract once all parties agree to all of the terms listed in the written offer.
Where do you get the forms? If you are working with a REALTOR®, they will have various forms that spell out the details of any real estate offer. Keep in mind that there are disclosures required for different circumstances pertaining to federally regulated issues like lead-based paint disclosure, etc. Your REALTOR® will know which regulations and disclosure are required for your situation- so I suggest you use the expertise available to you by working with a REALTOR®. If you choose not to work with a REALTOR®, you will have to draw up an offer to purchase that incorporates issues that might be required in your area. Laws and ordinances vary from area to area and need to be consulted before making the offer.
The offer must contain:
- Address of the property
- Sale price
- Terms- how you are going to pay for the property
- Assurance of clear title from seller
- Target date for closing- could be tricky as nothing is 100% guaranteed
- Earnest money deposit and explanation of who, what, when, where and how it is to be held and disposed of.
- How to deal with rents, taxes, bills
- Any provisions as to home and pest inspections, how to proceed if problems are found and time frames for inspections/requests for repair/responses.
- Contingencies- financing, sale of another home and inspection. There are many other kinds of contingencies that can be inserted into the real estate contract. All legal clauses should be checked out by an attorney. (Your REALTOR® should have clauses that have been attorney approved for most circumstances)
- Time limit- when the offer will expire.
Any offer can be withdrawn until the offer has been accepted without changes by both parties, with signatures in place.
If the seller does not accept ALL of the terms, he can reject the offer or make a counter offer. ANY change in the original offer constitutes a counter offer and will require agreement and signature of the buyer to the changes.
Have your REALTOR® prepare a “Net Proceeds for Seller” when considering an offer so that you are clear about whom traditionally pays for what at the closing. No one likes surprises at the closing!
A word of advice~ Use what you know to make decisions, but acknowledge what you don’t know to make good decisions, and hire an expert to make the best decisions!