Real Estate purchases are legal investments, thus it is mandatory to put your offer into writing. An offer to purchase is the first paperwork you will have to accomplish in order to enter a selling contract between you as the buyer and the seller. A written proposal, you will have to list down not just the purchase price, but also all terms and conditions of your intent to buy. For example, the sellers are willing to pay for home inspection then, you will have to also stipulate that in your offer. Also if you will need to reimburse utilities set-up costs towards the closing of the sale, be sure to have that included so you will not miss that out when the time comes to collect it.


What should your Offer to Purchase contain?


If your offer was accepted as you have submitted it, then it will become a binding sales contract. It the contract can also be know in other places as purchase agreement, intent to purchase or purchase agreement. What is crucial is that your offer will function as “blueprint of the sale” as it contains all the specifications that will complete the sale. Specifications, more or less will be as follows:


  • Address and (optional) a legal description of the property

  • Sale price

  • Terms - includes cash for your down payment, and other items concerning you mortgage loan.

  • Seller's promise to provide clear title (transfer of ownership)

  • Target date for closing (when the actual sale takes place)

  • Amount of earnest money deposit accompanying the offer - if it is in form of a check, cash or promissory note, as well as how it's to be returned to you if the offer is rejected - or if it can be kept as damages if you later back out for no 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 other miscellaneous expenses.

  • Type of deed to be given.

  • Other requirements specific to your state, which might include a chance for attorney review of the contract, disclosure of specific environmental hazards or other state-specific clauses

  • A provision that the buyer may make a last-minute walk-through inspection of the property just before the closing

  • A time limit (preferably short) after which the offer will expire

  • Contingencies, other important matters in which you will have to discuss such as;


Contingencies:

  • The buyer obtaining specific financing service from a lending institution. If the loan can't be obtained, the buyer won't be bound by the contract.

  • A satisfactory report provides by a home inspector for example "within 15 days after acceptance of the offer." The seller must wait 15 days to see if the inspector submits a report that satisfies you. If not, the contract would become void. Again, make sure that all the details are understood in the written contract.


So when you say "this offer is contingent upon (or subject to) a certain event," it means that the sale will push through if the conditions are met, such as the items listed above. If not, you as the buyer will not legally binded in his own offer and thus the contract becomes void.  
 
 

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