The Offer to Buy
Negotiating the Purchase
You've found it– your "dream" home! You want to buy it. Now what? You make an offer by submitting a signed real estate offer to purchase with the type of financing you desire. This is it, this will be the sales contract if the seller accepts it. Once you and the seller sign the paper, you are agreeing to the contract conditions. Before you sign it, read it carefully and make sure you understand it in every detail. Ask questions. 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. This is where the Century 21 Sales Representative and an attorney can give you the assistance you need.
Offers and Counter Offers
Your Century 21 Sales Representative will take the offer to a "contract presentation" with the home seller and the listing Sales Representative. In some areas, the three of them will discuss the offer, and the seller will accept it as written, or make "counter offers" on unacceptable aspects, or reject it. The selling Sales Representative will then bring back the offer to buy to the home buyer, who can accept it, counter the counter offer, or reject it. The offer to buy only becomes a contract when all parties have initialled every "counter offer" and signed the offer. When you sign the offer to buy you also will have to submit a deposit to show that you are serious about your desire to buy.
Making Sure Your Contract is Complete
Sales contracts differ, depending on circumstances, but there are several provisions you may want to include in a contract for the purchase of real estate.
Deposit. The amount of "money put down" 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 5% of the purchase price, deposited in trust and returned to you if the sale does not go through (for example, if you are unable to obtain the financing described in the contract) or forfeited if you decide not to buy.
Contingency on Financing. Be specific about the total loan amount, the date a second or third mortgage is due, and the exact financing terms (for instance, a buy-down mortgage rate at 10 1 / 2% for 3 years and 13% thereafter for 22 years.) Many contracts have an "alternative financing clause" that allows buyers to accept different financing than that which is written in the contract, as long as it doesn't affect seller's net proceeds.
Contingency on Inspection. If you feel the property may have structural or other defects, you may make the contract contingent on a building inspection report, satisfactory to you. You will usually have to pay for this inspection, but the peace of mind or detection of a problem may be worth the cost of inspecting.
Personal Property. Light fixtures, drapery rods, chandeliers, washers, dryers, refrigerators, heating oil in the tank, storm windows and doors, firewood, even swimming pool chemicals and other items not physically attached should be specified in writing if they're to be conveyed to the buyer. Misunderstandings based on verbal agreements can delay settlement as well as cause friction.
Repair Work. Sellers are responsible for plumbing, heating, mechanical, and electrical systems to be in working order at time of settlement, unless you agree to accept the property in "as is" condition. You and your Century 21 Sales Representative should conduct a "presettlement walk-through inspection" which should be made several days before or no later than the day of closing.
Title Transfer. Title Transfer is a complex procedure that should always be negotiated by a lawyer. You should shop and compare prices before deciding what attorney will conduct your closing.
Closing and Occupancy Date. You may want to include an arrangement with the seller in the event you can't secure possession on the agreed date, such as a daily rent-back agreement for "post settlement occupancy".