Real Estate Offers
One of the most common misconceptions among home buyers occurs when it comes time to making an “offer” or a “bid” on a home. Many believe that even though they have tendered an offer to the sellers, that their options are still open. To some degree, this is correct. If the seller rejects the offer, counteroffers it, or simply does not respond, options are still open. You, as the buyer, can accept the counteroffer, make another offer, or simply move on.
If, however, the seller accepts the offer (and you are notified of its acceptance) then a legally binding contract has most likely been struck. In the majority of cases and localities, there is not even the need for additional paperwork–the signed offer becomes the contract. Your options now are more of the “do we want to paint the master bedroom before or after we move in?” Once the offer has been accepted, the “lets think it over just a little bit more” phase has passed. This is why it is crucially important to make sure that all of your bases are touched and all of your intentions made clear in the offer–it can become a binding contract in the blink of an eye and a stroke of the seller’s pen.
Some of the items that need to be addressed in an offer are:
- 1.The proposed selling price (your offer).
- 2.Any concessions you desire the seller to make.
- 3.Any financing contingencies (for example, subject to you being able to obtain a satisfactory mortgage. You can go as far as to state maximum interest rates, specific terms, etc.)
- 4.Any home inspection contingencies (for example, subject to an acceptable whole house inspection report).
- 5.A clear definition of precisely what is to be included in the sale. Don’t simply assume that items such as porch swings, fireplace doors and refrigerators are included. Doing so usually causes some unpleasant surprises on moving day. If there is any question, be specific!
- 6.The amount of earnest money (your deposit) that is being tendered with the offer.
Since an offer can become a contract very quickly, it is important to understand how they are two sides of the same coin. See the discussion on contracts for more information.
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