PURCHASE OFFER
You found your dream house. You want to buy it. Now what?
With the help of your Long & Foster sales associate, you submit
a signed real estate offer to purchase with the type of financing
you desire. Before you sign it, read it carefully and make sure
you understand every detail. This will be the sales contract once
the seller accepts and signs the offer. Any verbal agreements should
be written into the contract. If you plan to have a lawyer represent
or advise you, retain one as early as possible.
Offers and Counter Offers
Your Long & Foster sales associate will take the offer to a
“contract presentation” with the home seller and listing
broker. The seller will accept it as written, make counter offers
on unacceptable aspects, or reject it. You can then accept it, counter-the-counter
offer, or reject it. The offer to buy becomes a contract when all
parties have initialed every counter and signed the offer.
When you sign the offer to buy, you will also have to show that
you are earnest about the purchase by submitting a deposit—appropriately
called earnest money.
Contract Provisions While sales contracts differ from transaction
to transaction, there are several provisions you may want to include:
- Deposit - The amount of earnest money should
be clearly stated, plus the amount of money you will be paying
at settlement and your sources of financing. A common purchase
deposit in many areas is 1-2% of the purchase price, deposited
in escrow.
- Financing Contingency - Be specific about the
total loan amount, the date a second or third mortgage is due,
and the exact financing terms. Many contracts have an “alternative
financing clause” that allows buyers to accept different
financing, as long as it does not affect the seller’s net
proceeds.
- Inspection Contingency - You may make the contract
contingent on a building inspection report. You will usually have
to pay for this inspection, but the peace of mind or detection
of a problem is well worth the cost of inspecting.
- Termites - The contract may require the seller
or buyer, depending upon the area, to pay for a termite inspection.
The results of this inspection may require payment to remove the
infestation and repair any resulting damages. You should get a
written report at settlement indicating that the property is free
and clear of any active termite infestation. In some areas, well
and septic certificates are also required.
- Personal Property - Specify in writing if items
not physically attached to the house are to be included in the
sale. These items can include light fixtures, drapery rods, appliances,
firewood, and even swimming pool chemicals.
- Repair Work - Standard contracts of sale require
sellers to confirm plumbing, heating, mechanical, and electrical
systems are in working order at the time of settlement. You should
conduct a pre-settlement walk-through inspection several days
before or no later than the day of settlement.
- Title Attorney or Insurance Company –
As the buyer, you have the right to select the title attorney
or insurance company who will conduct your settlement. Also, be
sure to clear the title company with the lender, whose interests
are also involved. Ask your Long & Foster sales associate
for a list of our Prestige Partners®, who provide settlement
and insurance services throughout our region.
- Closing and Occupancy Date - Include an arrangement
with the seller, such as a daily rent-back agreement, in case
they remain in the house past the settlement date.
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