The Basics Of Making An Offer
A written proposal is the foundation of a real estate transaction. Your purchase offer serves as the starting point, specifying the price and all terms of the purchase. This proposal evolves into a binding sales contract if accepted as written. Your agent will present the offer to the seller, either directly or through their agent.
What the Offer Contains
Your purchase offer includes critical details, such as:
- Property address and legal description
- Sale price
- Payment terms (e.g., cash or mortgage details)
- Seller’s promise to provide clear title
- Target closing date
- Earnest money deposit terms
- Responsibilities for taxes, utilities, and other fees
- Provisions for inspections and repairs
- Contingencies (e.g., financing approval, inspections)
Did You Know? Contingencies protect buyers by ensuring certain conditions are met before the sale goes through. Don’t overlook this essential part of your offer!
The Purchase Agreement
Real estate contracts in the U.S. must be in writing to be enforceable. Once signed by both parties, the Purchase Agreement becomes a binding contract. Pay attention to the following elements:
Key Elements
- Sales Price: The agreed-upon amount.
- Earnest Money: A deposit (1-5% of the price) demonstrating your seriousness.
- Title: Ensures legal ownership free from unacceptable claims.
- Inspection Clauses: Covers home, pest, and other necessary inspections.
- Contingencies: Conditions like financing or satisfactory inspections.
Negotiation and Counteroffers
Real estate transactions often involve negotiation. Sellers may accept, reject, or counter your offer. Be prepared to adjust terms like price, closing costs, or repairs based on these discussions.
Important: If your offer is countered, review all changes carefully before agreeing. A clear understanding avoids surprises later.
Closing Costs
While some closing costs are negotiable, many are dictated by local customs. Familiarize yourself with the "Who Pays What" section to better understand cost allocation.
What You Need To Know
The homebuying process involves discovery. From property condition to title status, gather the information needed for an informed purchase. For example:
- Transfer Disclosure Statement (TDS): Outlines known property conditions.
- Inspections: Ensure everything from plumbing to structural integrity is satisfactory.
- Contingencies: Protect yourself with conditions tied to financing or inspection outcomes.
Ready to make an offer? Contact us today to start your journey!
