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Making an offer to purchase real estate

Your realty agent can help you find your dream home, but you must decide how much you are willing to offer for it. The agent can supply you with information about the market value, selling prices and marketing time of  houses in the immediate search area.|

Once you have chosen one home you must decide what you are willing to offer. Your agent will assist you in preparing a written offer. In most transactions your offer will include earnest money to deposit with the escrow agent. Earnest money illustrates your sincerity in making a reasonable offer and meeting the terms of the written contract.

Contract forms
Your realty agent will assist you in preparing the offer using standard forms. The offer, upon acceptance by the seller, will become a binding contract. These documents are the most important papers you will sign because it sets all the terms of the agreement.
It consists of:

  • the legal description of the real estate property,
  • any property that will be transferred with the property, ie: window dressings, furnishings, etc.
  • the price,
  • conditions and contingencies of the financing,
  • total sum of earnest money to be deposited into escrow,
  • identifies the escrow agent and title company to be used,
  • proration of insurance, taxes, and interest,
  • fees to be paid and who pays for which fees,
  • rights to inspect the property and for repairs to be made,
  • dates of closing and possession, and
  • what happens if either party defaults on the contract.
Inspections and warranties
Before signing this all-important contract, take steps to protect yourself against unseen defects in the real estate property. An inspection should be made by a qualified professional that can evaluate the property and provide you with an unbiased opinion about the condition of the property including the foundation, systems such as, plumbing and electrical, roof, appliances, etc. Be aware that not all inspections are equal. The more extensive and thorough, the larger the property, the more expensive the inspection will be. It's a good idea to accompany the inspector as he goes about the property, so arrange your schedule accordingly. Ask the inspector beforehand how much time it will take and reserve this time in your schedule. Find out what he does inspect. Some are more thorough than others. Does he inspect the foundation, heating and ac, electrical, roof, swimming pool, termite damage or presence. If the property has septic, does he inspect that? This thorough may get expensive but could be well worth that cost. It's a good idea to get this inspection even if buying a new home. And you might want to consider purchasing a residential service contract. A company that provides an agreement will make repairs if certain systems or appliances fail. You should be aware what the scope of repairs will be and how your claim will be processed.
You may also want to investigate the possibility of buying a residential service contract. Such a contract is an agreement with a residential service company that certain items will be repaired by the company if such items fail to function after you move in. If you buy a new home, the builder may offer a warranty as well. Whether you buy a residential service contract or receive any other warranty, find out how claims will be processed and how any necessary repairs will be made.

Seller's options
Your agent will present the contract to the seller's agent or seller. The seller can exercise three options: accept, reject or make a counter offer. A counter offer is a rejection of your offer but includes an offer from the seller to the buyer. If the seller makes a counter offer you can exercise your options: accept, reject, or make another counter offer. The recipient of an offer or counter offer has the option of acceptance of the offer or making a counter offer.
Binding contract When the buyer and seller completely agree to all of the written terms and both parties sign the agreement, the document is a binding contract. The contract may give you certain rights:
  • inspection of the real property;
  • repair of certain items;
  • If repairs are required, the contract will specify who will bear the cost of the repairs, who will arrange for the repairs, and when the repairs must be made. Before escrow closes, be sure that the condition of the property is as required in the contract.
 Be absolutely sure to pay attention to the timeline for completion of these actions. You may have a restricted amount of time to provide a written copy of the inspection report to the seller. And also a specific limit on time to have the items repaired. Failure to comply with any of these terms could mean you waive certain rights. Consult an attorney if in doubt. Read and understand all facets of your contract. Comply with it's terms and conditions in a timely manner. A good real estate agent can walk you thru these steps.
 If repairs are required, the contract will specify who will bear the cost of the repairs, who will arrange for the repairs, and when the repairs must be made. Before you close, be sure that the condition of the property meets the required condition specified in the contract.


- Ingle Realty Team