Residential Homes - The Investor's Guide To Contracts
By Pierre Mouchette | Bits-n-Pieces
What Is A Real Estate Offer To Purchase?
It is a legally binding document outlining terms agreed upon when two or more individuals negotiate a real estate transaction. The terms outlined in an offer take effect upon signing. They typically include contingencies, appliances, and fixtures that remain, the deposit amount and who holds the deposit, who is responsible for paying closing costs, and the closing date. As an investor of real property, you will find yourself negotiating and signing a real estate Offer To Purchase any time you strike a deal.
An Offer To Purchase becomes legally binding when the document secures the status (terms agreed to) and is acknowledged (signed) by all parties. For example, if one party submits a counteroffer, the original contract will not be legally binding because both individuals did not agree to the terms.
Who Drafts The Offer To Purchase
The Offer To Purchase clarifies the home buying process while protecting the Buyer and Seller. It can be helpful to keep this in mind as you start to build the Offer To Purchase, and since all agreements are subject to legal scrutiny, this Offer To Purchase should be finalized by your real estate attorney.
As with all agreements, specific legal requirements must be met before an Offer To Purchase can be enforceable. The following are some requirements to be aware of:
The following are suggestions for you to include in your draft:
How It Works
To start, the prospective Buyer will submit their official offer letter. The Seller can either Accept, Reject or Counter the offer, changing purchase price, closing costs, or contingencies. This is the beginning of the negotiation portion of building a real estate contract. From there, the Buyer can choose to modify or accept the new terms, adjusting the same items listed above. Often this process occurs between the Buyer and Seller's real estate agents. What they eventually decide on will then become their real estate contract.