You’ve found the home you want. Now it’s time to make an offer on the property. Your Columbus real estate agent will provide you with a standard contract form that’s been approved by your local board of realtors. It’s called a “Real Estate Purchase Agreement.” What’s important to remember is that an offer isn’t just a price: it’s a set of terms, timelines and contingencies. Finding the right balance between price and terms is an art. Your realtor can give you expert advice here.
Let’s take a look at what’s included in a standard contract.
- Basic Data: This includes your name, the seller’s name, and the address of the property.
- The Price you Offer to Pay: In a buyer’s market, this figure could be significantly lower than the listing price. But in a seller’s market, your offer might be the asking price or even a little higher, unless there are mitigating factors.
- Items to be Included in the Sale: This section will list any appliances, fixtures, yard equipment, window dressings, etc. that will transfer to you with the purchase of the home.
- Contingencies: This section lists the terms upon which the sale rests. Typical contingencies include securing your financing, a successful home inspection, and maybe the sale of the buyer’s personal property.
- Disclosures: This section will list any issues that would adversely affect the property’s value. You’ll already have been given a standard property disclosure form from the seller.
- Seller Concessions: If the seller agrees to pay for part or all of the buyer’s closing costs, this is where the details will be put in writing.
- Taxes and Utilities: This section defines how any outstanding utilities and/or property taxes will be paid and by whom.
- Earnest Money: At the time of your offer, you will need to give some money to your agent’s broker who will then hold it in escrow. The money will be in the form of a check, and it’s typically 1% of the offer price, although it can also be $500 – $1,000. This payment is a sign of your seriousness in wanting to buy the property. It is refundable to you if the seller rejects your offer, or if the sale does not close because contingencies in the Purchase Agreement were not fulfilled.
- Proposed Closing Date: You’ll name a target closing date in the Purchase Agreement. This is usually 4-6 weeks from the date of the offer and should be coordinated with your lender.
- Offer Expiration Date: Most Purchase Agreements specify that an offer is only good for 24 -48 hours after being submitted.
You’ll sign your offer and your realtor will submit it to the seller’s agent. The seller will review it, and then accept it, reject it or make a counteroffer. The Purchase Agreement is only legally binding once both parties have signed off on the exact same terms.
As the buyer, you are in a position of strength if you can purchase the home for cash or have financing available. This is why it is so important to include your pre-approval letter with your purchase offer.
You’re also in a position of strength, if the house is currently vacant. Every month a property sits vacant costs the seller money. If you can take immediate possession of such a home, that will be attractive to the seller. Similarly, if the property is an estate sale or a distress sale, the seller is very motivated and will likely want to part with it quickly.
Can you withdraw your offer? The answer is “yes,” but only until your offer has been accepted. At that point you are legally bound to buy the property unless contingencies in the Purchase Agreement aren’t met. At a minimum, you will lose your earnest money deposit. In a worst-case scenario, you might be sued.
Great care must be taken before you make a purchase offer. That’s why it’s so important to work with an experienced realtor. Call Susanne today at 614-975-9650 to discuss making a winning offer on the home of your dreams.