The making of an offer will always have to be in writing to be enforceable. As Realtors we use forms that have been approved through our Oregon Association of Realtors. Our forms include Residential sale agreements, commercial sale agreements, farm & ranch sale agreements and Vacant land sale agreements.
What the Offer Contains:
The purchase offer you submit, if accepted as it stands, will become a binding sales contract (known as a purchase agreement, earnest money agreement, or deposit receipt). It’s important, therefore, that it contains all the items that will serve as a blueprint for the final sale. These purchase offer items include such things as:
1) Address (sometimes legal description) of the property;
2) Sale price;
3) Terms (all cash or subject to your obtain a mortgage for a given amount);
4) Seller’s promise to provide clear title (ownership);
5) Target date for closing (the actual sale);
6) Amount of earnest money deposit accompanying the offer, and whether it’s a check, cash or promissory note ( and how it’s to be returned if the offer is rejected, or kept as damages if you later back out for no good reason);
7) Method by which real estate taxes, rent, fuel, water bills and utilities are to be adjusted (prorated) between buyer and seller;
8) Provisions about who will pay for title insurance, termite inspections and the like;
9) Type of deed to be given;
10) A provision that the buyer may make a walk-through inspection of the property just before the closing;
11) A time limit (preferably short) after which the offer will expire;
12) Contingencies, which are an extremely important matter
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. The following are some common contingencies contained in a purchase offer.
A) The buyer obtaining specific financing from a lending institution. If a loan can’t be found, the buyer won’t be bound by the contract.
B) A satisfactory report by a home inspector within the time frame written in the offer as to when the home inspection is to occur and all negotiations have been completed from the inspection report. If seller and buyer cannot agree on negotiating repairs from the home inspection, the purchase agreement will become null and void and all earnest money will be returned to the buyer.
C) Getting a job that you have interviewed for.
What is important is to make sure that you put in details of your contingencies and that they are clear and understandable for the other party.
You’re in strong bargaining position (meaning, you look particularly welcome to a seller) if:
A) You’re an all-cash buyer; or
B) You’re already pre-approved for a mortgage; and
C) You don’t have a house that has to be sold before you can afford to buy.
In those circumstances, you may be able to negotiate a sale price from the listed price. It depends on the current market conditions and if there are competing offers for the same property.
It’s very helpful to find out why the house is being sold and whether the seller is under pressure. Keep these considerations in mind:
A) Every month a vacant house remains unsold represents considerable extra expense for the seller.
B) If the sellers are divorcing, they may just want out quickly; and
C) Estate sales often yield a bargain in return for a prompt deal.
Most Earnest Money is in the form of a check or promissory note. This shows good faith from a buyer in making the purchase. Earnest money in most cases is held in the title company and is used towards the purchase. If a sale becomes terminated, both seller and buyer will be asked to agree to have the funds disperse to the party.
The Seller’s Response to Your Offer:
The seller has the option of accepting your offer as it is presented to them or they can make a counter offer back to you or reject your offer as written. If the seller offers you a counter offer, you can accept the offer, make a counter offer back to the seller or reject the seller counter offer and the transaction then is failed. You will have a binding contract if the seller upon receiving your written offer, signs an acceptance just as it stands, unconditionally. If the offer is rejected and you still want the property, you can submit a new offer that can be in a backup position.
Withdrawing an Offer:
You can withdraw your offer at anytime unless the seller has acted on it, in most cases if you have not been notified by your Realtor.