What The Purchase Offer Contains

Lately, I have been getting asked many questions about what it takes to buy a home and how to start the process.  So, today, I thought I would write on what exactly an "offer" is comprised of.  This year, the California Realtor Association has re-vamped the "offer" form, also know as the "Residential Purchase Agreement."  I thought it would be particularly helpful to go over some of the key components and aspects an offer to purchase a property.

In real estate, oral contracts are not legally binding. If you wish to bid on a property, you must make a formal, written offer or proposal.  Your Crestico sales professional is experienced with the offer/counter-offer process, and will know which of a variety of standard proposal forms are suitable for your area. Once written, your Sales Professional will present your offer to the seller. (In some cases, this is all handled by the respective parties' lawyers.) We have provided the basic information needed during this critical phase here.

What the Offer Contains - Your written proposal may include, but is not limited to, the property's address and legal description, sale price, terms, earnest money, expiration date of the offer, prorating (adjustments) of utility bills, real estate taxes, insurance, contingencies, repairs and any other terms that you deem important.

Earnest money - Earnest money is a deposit given when making an offer. It demonstrates sincerity—"earnestness"—on the buyer's part. If the offer is accepted, it becomes part of the down payment. If not, it is usually returned.

Contingencies - A contingency means that the purchase is subject to certain events occurring, such as the buyer's loan being approved, or the property passing the termite inspection. If the contingencies aren't met, the offer is void.

Response - If the seller accepts the offer, and signs an acceptance, you have a deal. If not, you are free to walk away, and cannot be held liable for the contract. The seller may make you a counter-offer, and you are free to accept it or not, or make your own counter-offer. Only when an offer is accepted and signed by both parties is the contract binding.

Withdrawing an offer - In most cases you can withdraw your offer up to the point when it is accepted. If you do wish to cancel the offer, it's a good idea to consult with a real estate lawyer. You don't want to lose your deposit, or be sued for damages perceived by the seller.

 

Mitra Karimi
Crestico, Inc.
http://www.crestico.com
mitra.karimi@crestico.com