Oral promises are not legally enforceable when it comes to the sale of real estate. Therefore, you need to enter into a written contract, which starts with your written proposal. This proposal not only specifies price, but all the terms and conditions of the purchase.

Realtors® usually have a variety of standard forms (including Residential Purchase Agreements) that are kept up to date with the changing laws. When you use a Realtor® these forms will be available to you. In addition, Realtors® cover the questions that need to be answered during the process.

What The Offer Contains

The purchase offer you submit, if accepted as it stands, will become a binding sales contract. It’s important, therefore, that it contains all the items that will serve as a “blueprint for the final sale.” These purchase offer items include such things as:

• Address and a legal description of the property
• Sale price
• Terms — for example, all cash or subject to your obtaining a mortgage for a given amount
• Seller’s promise to provide clear title (ownership)
• Target date for closing (the actual sale)
• Amount of earnest money deposit accompanying the offer and how it’s to be returned to you if the offer is rejected — or kept as damages if you later back out for no good reason
• Method by which real estate taxes, HOA dues, etc. are to be adjusted (prorated) between buyer and seller
• Provisions about who will pay for title insurance, survey, inspections and the like
• Type of deed to be given
• A provision that the buyer may make a final walk-through inspection of the property just before the closing
• A time limit (preferably short) after which the offer will expire
• Contingencies, which are an extremely important matter.

Negotiating Tips

You’re in a strong bargaining position — meaning, you look particularly welcome to a seller — if:

• You’re an all-cash buyer; or
• You’re already pre-approved for a mortgage; and
• You don’t have a present house that has to be sold before you can afford to buy

In those circumstances, you may be able to negotiate some discount from the listed price. On the other hand, in a “hot” seller’s market, if the perfect house comes on the market, you may want to offer the list price (or more) to beat out other early offers. It’s very helpful to find out why the house is being sold and whether the seller is under pressure. Keep these considerations in mind:

• Every month a vacant house remains unsold represents considerable extra expense for the seller;
• If the sellers are divorcing, they may just want out quickly; and
• Estate sales often yield a bargain in return for a prompt deal

Earnest Money

This is a deposit that you give when making an offer on a house. A seller is understandably suspicious of a written offer that is not accompanied by a cash deposit to show “good faith.” The title company holds this money in their escrow account until closing and will apply to your down payment and/or closing costs at closing.

Buyers: The Seller’s Response to Your Offer

You will have a binding contract if the seller, upon receiving your written offer, signs and accepts just as it was written. The offer becomes a firm contract as soon as you are notified of acceptance. If the offer is rejected, that’s that, and the sellers could not later change their minds and hold you to it.

If the seller likes everything except the sale price, or the proposed closing date, you may receive a written counteroffer with the changes the seller prefers. You are then free to accept or reject it or to even make your own counteroffer.

Each time either party makes any change in the terms, the other side is free to accept or reject it, or counter again. The document becomes a binding contract only when one party finally signs an unconditional acceptance of the other side’s proposal.

Withdrawing an Offer

Can you take back an offer? In most cases the answer is yes, right up until the moment it is accepted. If you do want to revoke your offer, be sure to do so only after consulting an Attorney who is experienced in real estate matters. You don’t want to lose your earnest money deposit, or find yourself being sued for damages the seller may have suffered by relying on your actions.