The Offer

• What Is An Offer?
• Contingencies

What is in an Offer?

The purchase offer you submit, if accepted as it stands, will become a binding sales contract (known in some areas as a 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:

1. Address and the legal description of the property
2. Sale price
3. Terms: for example, all cash or subject to you obtaining a mortgage for a given amount
4. Seller’s promise to provide clear title (ownership)
5. Target date for closing (the actual sale)
6. Amount of earnest money deposit accompanying the offer, whether it’s a check, cash or promissory 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
7. Method by which real estate taxes, rents, fuel, water bills and utilities payments are to be adjusted (prorated) between buyer and seller
8. Provisions about who will pay for title insurance, survey, termite inspections, etc.
9. Type of deed to be given
10. Other requirements specific to your state, which might include a chance for an attorney to review the contract, disclosure of specific environmental hazards or other state-specific clauses
11. A provision that the buyer may make a last-minute walkthrough inspection of the property just before the closing
12. A time limit (preferably short) after which the offer will expire
13. Contingencies, which are an extremely important matter and that are discussed in detail 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 a 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.

• Buying vs. Renting
• Initial Consultation
• How Much Can You Afford
• Choosing A Lender
• Getting Pre-Qualified

• Finding Your Home - The Wish List
• Choosing a Neighborhood
• How To Choose A Home
• Home Tour Notes

• The Loan Process
  
• Home Inspections
  
• Closing