Making an Offer on a property
Oral promises are not legally enforceable when it comes to the sale of real estate. Therefore, you need to enter into a written contract, which starts with your written proposal. This proposal not only specifies price, but also, all the terms and conditions of the purchase.
REALTORS® usually have a variety of standard forms (including Residential Purchase Agreements) that are kept up to date with the changing laws. When you use a REALTOR® these forms will be available to you. In addition, REALTORS® cover the questions that need to be answered during the process. In many states certain disclosure laws must be complied with by the seller, and the REALTOR® will ensure that this takes place.
After the offer is drawn up and signed, it will usually be presented to the seller by your REALTOR®, by the seller’s REALTOR® if that’s a different agent, or often by the two together. In a few areas, sales contracts are typically drawn up by the parties’ lawyers.
When making an offer on a property, the offer contains the following.
The purchase offer you submit, if accepted as it stands, will become a binding sales contract (known in some areas as a purchase agreement). It’s important, therefore, that it contains all the items that will serve as a “blueprint for the final sale.” These purchase offer items include all such things as:
— Address and sometimes a legal description of the property
— Sales price
— Terms, for example: all cash or subject to your obtaining a mortgage for a given amount
— Seller’s promise to provide clear title (ownership)
— Target date for closing (the actual sale)
— Amount of earnest money deposit accompanying the offer, and 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
— Method by which real estate taxes, rents, fuel, water bills and utilities are to be adjusted (prorated) between buyer and seller
— Provisions about who will pay for title insurance, survey, termite inspections and the like
— Type of deed to be given
— An “Option Period” – time allowed to the buyer to have a certain amount of days, usually around 7, to “option out” of the contract and only lose the “Option Fee,” usually $100, but not the earnest money
— A time limit (preferably short) after which the offer will expire
— Contingencies, if any
How long does a seller have to respond to my offer? There is no mandated time limit, as a matter of fact, sellers are under no obligation to respond to any offers received. Sellers normally do not respond to “low-ball” offers.
In what fashion must a seller respond? There is no mandated fashion. Sellers may respond orally or in writing (text, email, or by making changes on the original offer). The seller may even elect to use the form, “Seller’s Invitation to Buyer to Submit New Offer” is designed to be used when negotiating an offer which is not acceptable to Seller and Seller does not want to make a counter-offer to Buyer, but wishes to invite Buyer to submit another offer with different terms.
Remember, it’s not only about the price being offered, but also the terms.
For more tips on making an offer, please contact me anytime!
Providing Solutions Because…Your Move Matters!
Michael L. Brownstead
First Sergeant, U.S. Army (Retired)
ABR, GRI, MRP, SRS, REALTOR
Keller Williams Realty
1002 Raintree Cir., Ste. 100, Allen, TX 75013