WHAT IS INVOLVED IN MAKING AN OFFER TO BUY A HOME?

If you have not purchased a home recently, you may be surprised by how complex purchase agreements are.  Today's purchase agreements are six pages or longer. And since verbal offers to buy real estate are not binding, your offer should always be in writing. 

Your real estate agent usually drafts the offer for you.  Most buyers are usually only think about the purchase price when making an offer.  The price is important but it's just one of the many terms and conditions that make up a real estate purchase contract.  Other items include the DEPOSIT, MORTGAGE, and DOWN PAYMENT AMOUNTS, the CLOSING & OCCUPANCY DATES, a LIST OF WHAT IS INCLUDED in the sale, CONTINGENCIES to protect the parties (title review, financing, inspections, or the sale of another property), PERFORMANCE TIME periods, a list of WHO PAYS FOR WHAT CLOSING FEES, and who is responsible for COMPLYING WITH LOCAL ORDINANCES (installing smoke detectors and strapping hot water heaters).

The document may include an arbitration clause, or a liquidated damages clause, in case the buyer defaults.   There are also various disclosures and affidavits that go along with the purchase agreement. SELLERS NEED TO KNOW ALL THE DETAILS OF THE BUYER'S OFFER BEFORE THEY CAN EVALUATE IT. Remember, once it is accepted, the purchase agreement is a legal document, binding on both parties.  Most purchase contracts are hastily written and many are incomplete.  That's because buyers and agents want to act quickly once they find the right home.  Acting quickly can make the difference between getting the home of your dreams or losing it to another buyer.

When making an offer, allow yourself enough time to understand the contract BEFORE YOU SIGN IT.  No matter how busy you are, you should sit down with your agent, carefully review the contract, and decide on the specific terms you want to include. When time and distance do not permit you to sit down in person with your agent to write the offer, it may have to be put together using a phone and fax.

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