When you have zeroed in on the home you truly want, then it is time to prepare a formal offer to purchase on a standard form known as the Contract of Purchaseand Sale. It is imperative that the drafting of this very critical document be done in conjunction with a real estate licensee, notary public, or lawyer.
The offer will contain all of the standard details identifying the buyer, the seller, the property, and various related details. Then it will outline the essential elements of your offer to purchase the property and all the conditions which you feel are necessary for the seller to meet in order to consummate the transaction.
You should be completely aware that once you place your signature on this document, it forms a legally binding agreement which can be enforced by law. Both the buyer and the seller will have legal obligations to fulfill under the terms of the contract and failure to do so can lead to a court date.
The offer should include:
- The date of the offer.
- The date and time that the offer is no longer valid, or expires.
- Both the buyer's and seller's full legal names and addresses.
- The full legal description of the residential property.
- The total price you are willing to pay for the home.
- The amount you are prepared to place as a down payment and the particulars of how the rest of the purchase price will be financed.
- The deposit amount which you are placing into a trust account and will be considered as a portion of the down payment (sometimes called "earnest money").
- Your preferred dates for closing and taking possession of the property.
- The "subject clauses" or list of conditions which you want to have fulfilled before the transaction can be concluded (sometimes called "conditions precedent").
- A specific description and listing of any items which are not physically attached to the building which you wish to have included in the deal, such as kitchen appliances, window treatments, outdoor fixtures, and more.
All aspects of the offer are important but none perhaps more than the subject clauses. These conditions spell out what events must successfully occur or the transaction will not be executed. In many offers, these include the possibility of the property not passing a home inspection, or the buyer not being able to obtain suitable financing or selling a previous property.