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Making
an Offer
Once you have found the property you
would like, a written offer to purchase
must be prepared. Considering the
substantial nature of this investment, you
should work with a lawyer, notary public
or a real estate agent licensee when
preparing an offer to purchase.
An offer is usually recorded on a
standard form entitled: CONTRACT OF
PURCHASE AND SALE.
What should the offer contain?
When you prepare an offer it should
contain a number of standard details, plus
any conditions that are important to you.
Be fully aware that once you sign this
document, and the seller also signs it, a
legally binding contract has been formed.
Legally binding means both you and the
seller will be bound by the terms of the
contract and must each perform your
respective obligations as stated within
that contract. Either of you can go to
court to compel the other to perform his
or her part of the contract.
Your offer should include:
| Date of offer.
Date and time your offer expires.
Full legal names and addresses of
both the buyer and the seller.
Full legal description of the
property.
Amount of the deposit you are
giving (which will be held in a trust
account).
Sale price.
Amount of your cash down payment
and details as to how you will finance
the remainder of the purchase price.
Your desired closing and possession
dates.
A list of the conditions that must
be satisfied before the sale can
occur. These are called "subject
clauses" or "conditions precedent"
A list of items that are not
attached to the building (chattels),
but which you state are to be included
in the sale price; for example,
drapes, refrigerator, stove, etc.
Your signature. |
What are the seller’s options?
When the seller receives your "offer to
purchase", he or she has three options.
1. Accept the offer exactly as written
If the seller signs your offer without
making any changes, a legally binding
contract has been formed.
2. Reject the offer
3. Make a counter-offer
If the seller changes anything at all
on your original offer, the seller is
considered to have rejected your offer and
to be making a new offer back to you. This
new offer is usually referred to as a
"counter-offer".
When you receive a counter-offer, you
then have the same three options as the
seller had: accept, reject or make a
further counter-offer. The process of
counter-offers may continue until an
agreement is reached.
If the counter-offer is unacceptable to
you or if you have changed your mind about
the purchase, the seller does not have the
option of returning to your original offer
and accepting it.
What are the buyer’s options?
If after making a written offer you
decide you don’t want to purchase the
property, it may be possible to revoke the
offer. Many legal problems can result from
revocation of an offer, so you should seek
professional advice about the correct
procedure to follow.
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