Purchase offers are known by different names in different parts of the country, including:
Earnest Money Agreement
The documents themselves vary according to the provisions and requirements of state and local jurisdictions. These days they usually are quite long.
In some states, only attorneys are allowed to prepare real estate contracts. In others, real estate agents may prepare such contracts using state-approved, pre-printed real estate forms. If this is the case where you are, your agent will have the printed forms that are standard in your area.
Do Not skip This Step
Most buyers are working with a real estate agent who supplies forms for entering into a real estate purchase agreement with a seller. The terms of the contract involve many significant points in addition to the purchase price, including financing, contingencies, title work and closing date. Due to the detail and liabilities associated with this transaction, it is important to consider enlisting the services of your own attorney to review the contract. The so-called “standard” contract may contain clauses that are not in your best interest. Real estate attorneys will often review or consult on a purchase agreement for a nominal fee, which is well worth paying.
As with any business transaction, each party has certain responsibilities. In real estate, the script goes something like this:
How to Decide What Price You Will Offer
To prevent worry on your part about your offer price, ask your real estate agent to prepare a CMA, or comparative market analysis. A CMA report will compile information from the comps you should already have seen — individual descriptions of similar properties that are or have recently been on the market.
The report will include the list and sales prices for properties that have recently sold as well as list prices for pending sales, meaning the seller has agreed to sell the house to a buyer, but the transaction hasn’t closed yet. (A property in this situation is sometimes described as “in escrow.”) The CMA can also include active listings and expired listings — houses that didn’t sell and were taken off the market.
Typically, the CMA report is designed to let you quickly compare elements such as square footage, age of the home, number of bedrooms and baths, size of major rooms and amenities such as fireplaces and swimming pools. It may also list property taxes and school districts, and it should also tell you how long each property has been or was on the market.
Using all this information, you and your agent can add or subtract dollars for the plusses and minuses of the other homes to come up with a probable market value for the home you’re interested in. (And be sure to check Zillow.com for the latest market values for your target house and others in its neighborhood.)
Factors to Consider
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The written offer you submit to a seller becomes a binding sales contract if the owner accepts. Dale Heck, your Pinehurst NC real estate professional, will ensure that your offer is complete and serves your best interests.
Your offer includes:
Address and legal description of the property
Common contact contingencies include the buyer obtaining specific financing from a lending institution, a satisfactory report by a home inspector, and an appraisal for at least the value of the contracted price
Contingencies that state the sale will only go through if certain conditions are met
A time limit after which the offer will expire
Other requirements specific to your sale. These might include special inspections, tax advice, or occasionally, attorney review, disclosure of specific environmental hazards, or other state-specific requirements
Price you are offering to pay for the property
Terms such as "all cash" or "subject to you obtaining a mortgage for a given amount"
Anticipated closing date when title will be transferred
Earnest money accompany the offer and cash-at-closing balance required, as well as the form it is in, i.e. check or promissory note
Contract provisions stating which party is responsible for the title insurance, survey, property inspections and similar expenses
Type of deed to be conveyed
A provision that the buyer may make a last-minute walk-through inspection of the property just before closing
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- information gathered from zillow.com
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