Homes or Land in Moscow, Idaho

 The Basics of Making an Offer

A written proposal is the foundation of a real estate transaction. Oral promises are not legally enforceable when it comes to the sale of real estate. Your proposal specifies price, terms, and conditions of the purchase. If the seller offered to help with $2,000 toward your closing costs, make sure that's included in your written offer and in the final completed contract, or you won't have grounds for collecting it later.

REALTORS^® have standard purchase agreements and will help you put together a written, legally binding offer that reflects the conditions that are right for you. Terri will guide you through the offer, counteroffer, negotiating and closing processes.

If you are not working with a real estate agent, keep in mind that you must draw up a purchase offer or contract that conforms to state and local laws and incorporates all the key items. State laws vary, and certain provisions may be required in your area.

 

What is in an Offer?

The purchase offer you submit, if accepted as is, will become a binding sales contract. It's important that the purchase offer contains all the items that will serve as a "blueprint for the final sale." The purchase offer includes items such as:

• Address and legal description of the property
• Sale price
• Seller's promise to provide clear title (ownership)
• Target date for closing (the actual sale)
• Amount of money accompanying the offer, whether it's a check, cash or promissory note, and how it's to be returned to you if the offer is rejected - or kept as damages if you later back out.
• Method by which real estate taxes, rents, fuel, water bills and utility payments are to be adjusted (prorated) between buyer and seller.
• Provisions about who will pay for title insurance, survey, termite inspections, etc.
• Type of deed given.
• A provision that the buyer may make a last-minute walkthrough inspection of the property just before the closing.
• A time limit (preferably short) after which the offer will expire.
• Contingencies (explained below)

Contingencies - “Subject to” Clauses

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. Here are two common contingencies contained in a purchase offer:

• The buyer obtaining specific financing from a lending institution: If the loan can't be found, the buyer won't be bound by the contract.
• A satisfactory report by a home inspector: for example, "within 10 days after acceptance of the offer." The seller must wait 10 days to see if the inspector submits a report that satisfies the buyer. If not, the contract would become void. Again, make sure that all the details are explicitly stated in the written contract.

Negotiating Tips

You're in a strong bargaining position, that is, you look particularly welcome to a seller, if:

• You're an all-cash buyer.
• You already have a preapproved mortgage and you don't have a present house that has to be sold before you can afford to buy.
• You’re able to close and take possession at a time that is especially convenient for the seller.

In these circumstances, you may be able to negotiate a form of discount from the listed price.

In a "hot" seller's market, if the perfect house comes available, you may want to offer the list price (or more) to beat out other early offers.

It's very helpful to find out why the house is being sold and whether the seller is under pressure. Keep the following considerations in mind:

• Every month a vacant house remains unsold, it represents considerable extra expense for the seller.
• If the sellers are divorcing, they may want to sell quickly.
• Prompt deals often yield bargains.

Earnest Money

This is a deposit that you give when making an offer on a house. A seller is understandably suspicious of a written offer that is not accompanied by a cash deposit to show "good faith." A real estate agent or an attorney usually holds the deposit which will become part of your down payment.

 

The Seller's Response to Your Offer

You will have a binding contract if the seller signs an acceptance just as it stands, unconditionally. The offer becomes a firm contract as soon as you are notified of acceptance. If the offer is rejected, that's that - the sellers can not later change their minds and hold you to it.

If the seller likes everything except the sale price, proposed closing date, etc. you may receive a written counteroffer including the changes the seller prefers. You are then free to accept, reject, or even make your own counteroffer.

Each time either party makes a change in the terms, the other side is free to accept, reject or counter again. The document becomes a binding contract only when one party finally signs an unconditional acceptance of the other side's proposal.

 

Withdrawing an Offer

Can you take back an offer?

In most cases the answer is yes, right up until the moment it is accepted, or in some cases if you haven't yet been notified of acceptance. If you do want to revoke your offer, be sure to do so only after consulting a lawyer who is experienced in real estate matters. You don't want to lose your earnest money deposit or find yourself being sued for damages the seller may have suffered by relying on your actions.