The Offer: Real Estate Buying Process

Once a property is chosen, get together with your Buyer Broker to go over the offer in detail.

Offers to purchase real estate in the Capital Region are made using the same form that will become the Purchase Contract. Therefore, the offer, once accepted, is a legally binding contract. If not fully understood consult an attorney before signing.

However, if the offer is fully understood it is usually signed before attorney's approval since a period of two to five days is typically added to allow both the seller and the buyer the opportunity to seek legal consul as to all matters. This allows the negotiation process to proceed to acceptance with the understanding that either party has the option of cancelling the contract within this time period.

Most sellers will not consider an offer unless it is accompanied by a pre-qualification or pre-approval letter.

In addition, a good faith deposit is usually required with the offer. This check should be an amount at least equal to 1% of the purchase price. A larger deposit can strengthen an offer. If the offer is not accepted or the contingency cannot be met within the terms of the contract the deposit is returned.

Once the offer is made the seller has the option of accepting the offer outright, countering the offer with a price and terms that would be acceptable to them, or rejecting it. If they counter the offer the buyer is not required to accept their counter offer. If the buyer then counters the counter offer, the seller has no obligation to accept. This negotiation continues until an agreement is reached and the closing phase begins. If agreement cannot be reached the contract is void and the deposit is returned.

The contract In brief:

¶ 1. Identifies the purchaser and seller

¶ 2. Identifies the property to be sold

¶ 3. Items included in the sale. typically anything that is permanently affixed to the property. If an item on the list is not present it is not applicable

¶ 4. Items excluded: things that may be taken by seller such as an heirloom chandelier

¶ 5. Offering price

¶ 6. mortgage contingency. If the purchaser cannot obtain a mortgage using due diligence the contract is cancelled and deposits returned

¶ 7. notice that mortgage expenses are to be paid by purchaser

¶ 8. Other terms that can be added not covered in the standard contract form

¶ 9. How title is to be insured and whether the purchaser or seller pays

¶ 10. Proposed use of the property

¶ 11 What form of deed will be granted to the purchaser

¶ 12 New York State transfer tax: generally paid by the seller

¶ 13 Adjustments to the proceeds of sale determined at closing

¶ 14. Allows the purchaser a final inspection immediately before closing

¶ 15. Target date when closing will take place. This date is approximate unless verbiage such as: Time is of the essence is inserted into the contract

¶ 16. Where the earnest money deposit money is held and under what circumstances it will be returned

¶ 17. How long the seller has to respond to the offer before it becomes null and void

¶ 18. Details broker compensation generally paid by seller

¶ 19. Time period for attorney approval and notification requirements

¶ 20. Notice that the property is being sold "as is".

¶ 21 Inspection contingency details what inspections, when, and who by

¶ 22 Addendum that are part of the contract, typically: agency disclosure, property condition disclosure, lead paint, affiliate companies, etc.

¶ 23 how notices under the contract are to be delivered

¶ 21 affidavit that this is the entire contract