Offer To Buy
You’ve found your “dream home”! Now you want to make an offer to buy by writing a sales contract. This is how my years of experience work for you to assist you in making the best offer. Among the major provisions of the sales contract:
1. Deposit – The amount of “earnest money” should be clearly stated in the contract. A common purchase deposit varies between 2 to 5 % of the sales price and in many cases symbolizes buyer’s seriousness to purchase the property. The deposit is held in escrow until settlement and is part of your down payment.
2. Contingency on Financing – Be specific about the total loan amount including second trust, if any, and the exact financing terms. Many contracts have an “alternate financing clause” that allows buyers to accept different financing than that which is written in the contract, as long as it does not affect seller’s net proceeds.
3. Contingency on Inspection – You may make the contract contingent on a home inspection conducted by a licensed inspector (ASHI member) whose fees are paid by you at the time of inspection. The peace of mind or detection of a problem is well worth the cost of inspecting.
4. Termites– The contract may require the seller or buyer, depending upon the area, to pay for a termite inspection. The results of this inspection may further require payment for removal of the infestation and repair of any damages from the infestation. You should get a written report at settlement indicating that the property is free and clear of any active termite infestation. In some areas, well and septic certificates are also required.
5. Personal Property– Light fixtures, drapery rods, chandeliers, washers, dryers, refrigerators, heating oil in the tank, storm windows and doors, firewood, even swimming pool chemicals, and other items not physically attached on verbal agreements can delay settlements as well as cause friction.
6. Repair Work– Standard contracts of sale require sellers to be responsible for plumbing, heating, mechanical, and electrical systems to be in working order at time of settlement. You should conduct a “ pre-settlement walk-through inspection” which should be made several days before or not later than the day of settlement.
7. Title Attorney or Insurance Company-The buyer has the right to select a title attorney or insurance company. You should shop and compare prices before deciding what attorney or Title Company will conduct your settlement. Also, be sure to clear the title company with the lender, whose interests are also involved.
8. Closing and Occupancy Date– Include an arrangement with the seller in the event you can’t secure possession on the agreed date, such as a daily rent-back agreement for “post-settlement occupancy”.