Written documents are the foundation of a real estate transaction. Oral promises are not legally enforceable when it comes to the purchase or sale of real property.
To purchase property, you’ll start with a written offer which will specify the price and the terms and conditions of the proposed purchase.
CENTURY 21 REALTORS® have access to a variety of standard forms that change periodically to stay current with the state laws. They’ll help you understand every part of the contract and answer any and all questions. In addition, both Idaho and Washington have specific disclosure laws that are required.
The written offer will typically contain (but not limited to) the following:
- Legal description of the property
- Purchase price
- Seller’s promise to provide clear title
- Target date for closing the transaction
- Amount of earnest money deposit and how it’s to be handled if the offer is rejected or the transaction doesn’t close
- Method by which real estate taxes, rents, fuel, etc. are to be adjusted (prorated) between buyer and seller
- Provisions about who will pay for title insurance, survey and inspections
- Type of deed to be given
- A specific time period the offer is valid
- Personal property or other items specifically included or excluded from the transaction
Most offers contain language similar to “this offer is contingent upon (or subject to) a certain event.” The two most common are:
- Specific financing from a lending institution
- Satisfactory report(s) by inspector(s)
It’s helpful to find out as much as you can about why the house is being sold keeping in mind that every month a house remains unsold means extra expense for the owners.
You’re in a good position if you’re an all cash buyer, already pre-approved for a mortgage and don’t have other property that needs to be sold before you can purchase.
This is the deposit accompanies the purchase offer to demonstrate “good faith.” The higher the amount, the more serious your offer may appear to the seller.
The Seller’s Response
You will have a binding contract if the seller signs an acceptance and the offer becomes a firm contract as soon as you are notified of acceptance. On the other hand, the offer may be rejected or simply not responded to which indicates they do not accept the terms and conditions contained in your written offer.
If the seller agrees to some items, but not all, items you may receive a written counteroffer outlining their proposed changes. Each time either party makes any change in the terms, the other party is free to accept, reject it or counter again. The document becomes a binding contract only there becomes “a meeting of the minds” meaning both parties now agree to the terms and conditions.
Withdrawing An Offer
In most cases either party can withdraw their latest offer or counter offer at anytime prior to the other party’s written acceptance.
It’s extremely important to thoroughly understand every element of the contract and consult with a lawyer experienced in real estate matters if you don’t.