When it’s time to make an offer, the real estate broker representing the seller will often produce a standard form listing the price and other details of the purchase offer. This form should be read with great care, because if accepted, it’s a binding contract.
The agreement form should include:
- Address and legal description of the property.
- Financing details.
- Desired closing date.
- What comes with the house and what’s to be removed.
- Contingency clauses, which say you won’t buy the house unless you’re satisfied with a home inspection, certain financing is available, or other standards have been met.
After the first offer, you may receive a counteroffer from the seller. Like your first offer, the counteroffer should be in writing. You may trade counteroffers with the seller several times until both parties reach an agreement or walk away from the deal. If you reach an agreement, you sign the counteroffer and you have a deal (subject to the contingencies included in your contract). Again, do not sign any paperwork until you have consulted with your representatives.
You’ll probably be required to make an earnest money deposit that will either be applied to your down payment or forfeited if you pull out of the deal for reasons not allowed by your offer. The check should not be made out to the seller; rather, it should go to the real estate company and have trustee or fiduciary agent written after the name. Be sure the check is not deposited until your offer has been accepted.