Buying Your New Home
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. REALTORS® will ensure that this takes place.

If you are not working with a REALTOR®, keep in mind that you must draw up a purchase offer or contract that conforms to state and local laws and that incorporates all of the key items. State laws vary, and certain provisions may be required in your area.

After the offer is drawn up and signed, it usually will be presented to the seller by your REALTOR®, by the seller’s agent if that’s a different agent or often by the two together. In a few areas, sales contracts typically are drawn up by the parties’ lawyers.

WHAT THE OFFER CONTAINS
The purchase offer you submit, if accepted as it stands, will become a binding sales contract (known in some areas as a purchase agreement, earnest money agreement or deposit receipt). It’s important, therefore, that it contains all the items that will serve as a “blueprint for the final sale.” According to NAR, these purchase offer items include the following:
  • Address and sometimes a legal description of the property
  • Sale 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 (actual sale)
  • Amount of earnest money deposit accompanying the offer; whether it’s a check, cash or promissory note; 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
  • 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 walkthrough inspection of the property just before the closing
  • A time limit (preferably short) after which the offer will expire
  • Contingencies

EARNEST MONEY
This is a deposit that you give when making an offer on a house. A seller is understandably suspicious of a written offer that is not accompanied by a cash deposit to show “good faith.” A real estate agent or an attorney usually holds the deposit, the amount of which varies from community to community. This will become part of your down payment.

CONTINGENCIES
If your offer says “this offer is contingent upon (or subject to) a certain event,” you’re saying that you will only go through with the purchase if that event occurs. The following are two common contingencies contained in a purchase agreement:
  • The buyer obtaining specific financing from a lending institution (If the loan can’t be found, the buyer won’t be bound by the contract.)
  • A satisfactory report by a home inspector “within 10 days (for example) after acceptance of the offer” (The seller must wait 10 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 nailed down in the written contract.)

THE SELLER’S RESPONSE TO YOUR OFFER
You will have a binding contract if the seller, upon receiving your written offer, signs an acceptance just as it stands, unconditionally. The offer becomes a firm contract as soon as you are notified of acceptance. If the offer is rejected, that’s that, and the sellers could not later change their minds and hold you to it.

If the seller likes everything except the sale price, the proposed closing date or the basement pool table you want left with the property, you may receive a written counteroffer, with the changes the seller prefers. You are then free to accept or reject it or to even make your own counteroffer. For example, “We accept the counteroffer with the higher price, except that we still insist on having the pool table.”

Each time either party makes any change in the terms, the other side is free to accept or reject it or counter again. The document becomes a binding contract only when one party finally signs an unconditional acceptance of the other side’s proposal.

   
1
2
3
4
5
6
 
Chapters
Buying Your New Home Thanks to a sound economy, ...
Building Your Custom Dream Home Now that you are ...
Metropolitan Living Across the Bay East Bay is the ...
Learning From Kindergarten to College California’s public education system ...
Your Guide to Financing and Mortgage Although a newcomer ...
Quality Health Services for Bay Area Residents The San ...
Protecting Your Family and Property in San Francisco Once ...
Trailing Spouses—Job Hunting in the Bay Area Many San ...
RURAL PLEASURES NEAR THE URBAN CENTER The North Bay ...
A DIVERSE COMMUNITY IN THE BAY AREA The Peninsula ...
Planning and Managing Your Move It’s been a hectic ...
Staying Organized Before The Move You’ve just received exciting ...
Alternatives to Buying a Home As a newcomer to ...
San Francisco In Depth Officially named the City and ...
An Unmatched Quality of Life San Francisco is one ...
The Technology Capital of the West Coast South Bay ...
Ease of Living With A View If you ask ...