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Oral promises are not legally enforceable when it comes to the sale of real estate. Therefore, you need to enter into a written contract, which starts with your written proposal. This proposal not only specifies price, but all the terms and conditions of the purchase. REALTORSâ usually have a variety of standard forms (including Residential Purchase Agreements) that have been utilized thousands of times and are kept up to date with the changing laws. When you use a REALTORâ these forms will be available to you. In addition, REALTORS® offer protection for all parties and cover the questions that need to be answered during the process. In many states certain disclosure laws must be complied with by the seller, and the REALTORâ will ensure that this takes place. After the offer is drawn up and signed, it will usually be presented to the seller by your REALTORâ, by the sellers' REALTORâ if that's a different agent, or often by the two together. The purchase offer you receive, 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." These purchase offer items include such things as:
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 some common contingencies contained in a purchase order:
Again, make sure that all the details are nailed down in the written contract. When an offer comes in, you can accept it exactly as it stands, refuse it (seldom a useful response), or make a counter-offer to the buyers, with the changes you want. In evaluating a purchase offer, you should estimate the amount of cash you'll walk away with when the transaction is complete. For example, when you're presented with two offers at once, you may discover you're better off accepting the one with the lower sale price, if the other asks you to pay points to the buyer's lending institution. Once you have a specific proposal before you, calculating net proceeds becomes simple. From the proposed purchase price you can subtract:
Your present mortgage lender may maintain an escrow account into which you deposit money to be used for property tax bills and homeowners insurance premiums. In that case, remember that you will receive a refund of money left in that account, which will add to your proceeds. When you receive a purchase offer from a would-be buyer, remember that unless you accept it exactly as it stands, unconditionally, the buyer will be free to walk away. Any change you make in a counter-offer puts you at risk of losing that chance to sell. Who pays for what items is often determined by local custom. You can, however, arrive at any agreement you and the buyers want about who pays for:
TIP: You may feel some of these costs are none of your business, but many buyers, particularly first-timers, are short of cash. Helping them may be the best way to get your home sold. |
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