Accepting an Offer
Ok, you now have an offer with terms and price that you are willing to
accept, and who knows, maybe you've been lucky enough to negotiate
multiple offers. Well, now is the time to accept one.
You will want to establish a written agreement between you and the buyer
acknowledging that you are accepting their offer under the terms and conditions
negotiated. Typically, a purchase agreement is created.
Purchase Agreement
The purchase agreement (also known as "Binder Agreement", "Contract of
Purchase", or "Sales Agreement") is a contract stating the terms of a purchase.
The contract states that you agree to sell and the buyer agrees to buy,
under certain specific terms and conditions detailed in writing and signed
by both you and the buyer.
You may have received a purchase agreement as the basis of your
offer, but if you didn't,
now is the time to put one together,
you may want to consult with your attorney and obtain a template
purchase agreement for your state. An excellent generic template based on
the California Association of Realtors Real Estate Purchase Contract can be found in
How to Sell Your Home Without a Broker.
In addition, we've included a few found on the Web for you to review:
Your purchase agreement may contain such items as
escrow, title and vesting, possession and keys, fixtures, personal property, as well as
many other important sections for you and the buyer to agree upon. However, pay particular
attention to the following contingencies, or else your sale could fail:
- securing the mortgage
- buyer's inspection
- sale of buyer's property
- time periods, satisfaction/removal of contingencies, disapproval cancellation rights
It is important that the agreement (as well as all offers and counteroffers) is signed by
all parties involved. If both you and your spouse are on the title, then you both must sign
the agreements for them to be valid. If the transfer is to occur with more than
one buyer, then both buyers must sign as well.
Prior to signing and executing the agreement,
make sure there are no blank lines on the agreement. If there are blank lines, draw lines
through them or put not applicable (N/A) on them. Most importantly, just make sure there are no blank
lines. Signing a contract with blank lines is like handing someone a blank check with your
signature on it!
Contingencies
Ok, the ideal buyer would be one with cash and who is willing to take your property "as-is," without
an inspection. We've got bad news for you - this won't happen. What you will have is a buyer
whose agreement might be contingent on securing a mortgage, inspecting the property, and/or
selling their existing home. The less contingencies a buyer has, the easier your sale will
close. You may want to consider buyer contingencies if you are entertaining multiple offers. Also,
don't be afraid to exercise your right to have back-up offers, just in case.
Basically, a contingency states that both you and the buyer can terminate the agreement, free
of obligations, if one of the conditions in the agreement fails to occur. If this were to happen,
there are a couple of ways you can handle the contingencies.
For instance, if the inspector's report says the furnace is almost gone, you may want to
negotiate a new furnace into the contract. Be aware that you'll probably have to pay for it. You may also
want to consider financing some of the down payment yourself if that appraisal comes
in under the loan amount. You can have the buyer issue a promissory note. Whatever the
case may be, such as a buyer fails to sell their home by specified time, you should take
the necessary precautions so that you can successfully sell your home.
Ok, it's time to close -->
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