A written proposal is the foundation of a real estate transaction. Realtors have a variety of standard forms that are kept up to date with the changing laws. When you use a realtor these forms will be available to you. Realtors cover the questions that need to be answered during the process. Certain disclosure laws must be compiled with by the seller, and the realtor will ensure that this takes place.
After the offer is drawn up and signed, it will be presented by your realtor.
If your offer says “this offer is contingent upon (or subject to)” a certain event, you’re saying that you will only go through with the purchase if that event occurs. For example –
- The buyer obtaining specific financing from a lending institution. If the loan can’t be found, the buyer won’t be bound by the contract.
- A satisfactory report by a home inspector “within 10 days after acceptance of the offer.”
Earnest money 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.” This will become part of your down payment.
As a buyer, you will have a binding contract if the seller, upon receiving your written offer, signs an acceptance just as it stands, unconditionally. 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.
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 counter offer.
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.