Writing An Offer To Purchase Real Estate
Just found the home of your dreams and want to purchase it? It's time then to write an offer to purchase a real estate property. The process needs careful study, research and should not be made in a rush. Remember that your purchase offer is critical in negotiating a sales contract with the seller.
The purchase offer is a very important legal document that details the price you are going to pay for the property as well as several terms and conditions such as the mode of payment – if it's going to be cash or funded by a lender, the down payment, the investigations to be connected, timeframe, what personal property will be included, the closing costs and who will pay for them, terms of cancellation, any repairs you want done, the date of closing and possessing the property and other contingencies.
In writing the offer, your aim is to get what you want but it's also best if you put yourself in the shoes of the seller. Anticipating the seller's reactions will give you a better perspective in deciding what conditions to consider in your offer. Be sure that you use the proper form as each state has its own laws on real estate.
One of the most important considerations in writing the offer is your purchase price. Be specific and realistic about your price. If you know that there are multiple offers, consider offering a higher price or making a big down payment to get the seller's nod.
Making a reasonable initial deposit or down payment is also vital in a purchase offer. You can pay in cash, personal check, cashier's check or by using a personal property, real property, mortgage or promissory notes. Specify the person who will keep the deposit. Normally, it's a third party like the seller's attorney or the buyer's agent.
Including your financing terms if it's FHA, VA, conventional, contract of sale or assumption of mortgage. You may also include the maximum interest rate if you wish.
Contingencies are essential as well since these serve as your protection should the deal fail to push through. These written clauses will allow you to cancel the contract without penalty in case something goes wrong during the negotiation. Common contingencies include obtaining financing, property appraisals and inspections done by professionals to ensure that they pass your standards and that the property you are buying is in good condition.
Be specific about dates and timeframes. The expiration date of the offer should be stipulated and the seller should be given sufficient time to respond to the offer. Both the buyer and the seller have to agree on the closing date. For more information on purchase offer expiration, check your state contract laws.
The date of possession of property by the buyer should be clearly stated to avoid confusion and other problems. Will it be on the day of closing or a day after or two to three days after closing? The buyer and the seller have to agree on the date of occupancy. But normally, a seller is given up to three days to move out of the house and turn over the keys and possession to the new owner.
Stipulate in your purchase offer as to who will pay the necessary fees like title, escrow, county or city transfer taxes and closing costs. These fees may be shouldered by the seller or the buyer or split by both. If you're not sure about the custom in your area, consult a real estate agent or lawyer before you write this portion.
