THE REAL ESTATE TRANSACTION: MAKING AN OFFER-THE AGREEMENT OF PURCHASE & SALE

Time to Make an Offer – The Agreement of Purchase and Sale

 

Put yourself in the Sellers shoes and imagine how they will react to everything you are about to request in an offer. Communicate clearly with your Realtor and consider all aspects of chattels, conditions, terms and timing.  Experienced Real Estate Professionals will guide you as the process unfolds – there are always three outcomes to every decision in the negotiating phase.

Any party can:

1.     accept the offer at any stage within the irrevocable time frame

2.     sign back with changes extending a time frame

3.     not sign back and allow it to expire

 

Pertinent Information:

Legal Names

Provide the legal name for all parties to be included on title.

 

Purchase Price

Have your Realtor do a market analysis. This will show fair market value and comparable properties sold recently. The following factors could affect your offer price:

Property condition

Home improvements

Market conditions - Supply versus Demand – is there a good level of inventory?

Seller’s motivation

Multiple Offers – anticipate a higher sale price with multiple bids and always offer your best in order to secure a sale.  

Deposit Funds

An accepted Agreement of Purchase and Sale is a contract that requires a deposit to make it legally binding. Guidelines for deposit is between 5-10% of the purchase price on average.

Deposit Funds are placed in the Listing Brokerage’s  Trust Account and released upon completion of a sale or returned if conditions are not fulfilled and the contract becomes null and void.

 

Irrevocable Period

An offer or counter offer will be presented to a party for a finite amount of time. Beyond the irrevocable period, the offer become null and void. 

 

Completion Date:

This is the date you take title and possession of the home where keys are exchanged. It is important to consider that completion must be a weekday or business day, and not on holidays or weekends.

 

 

 

Chattels Included and Fixtures Excluded

Chattels are personal items such as appliances and furniture owned by the Seller that the Buyer may request as part of the Agreement of Purchase and Sale.  Fixtures excluded are items that are attached to the walls/ceilings that  the Seller may opt to keep. These items  often include mirrors in bathrooms, medicine cabinets, light fixtures or family heirlooms.

 

Financing Condition

A condition will be included if financing is required. Regardless if lender preapproval was given, the lender needs to approve the actual home prior to purchase.  Bank ordered appraisals are common in the process of final approval. The typical time frame to fulfill the condition of final approval for financing is 10 business days.

 

Home Inspection

A home inspection is highly recommended in order to review the state of the home and the systems servicing the home.  Careful consideration must be given and dire consequences may result if you opt out of this condition of inspection. A list of independent professional home Inspectors is provided. Perform the Inspection with your Realtor and review the report in detail with the Inspector before fulfilling or waiving this condition.  Please Note: no home is perfect.  Depending on level of maintenance and age of home, maintenance items not visible to the Buyer may be found by a home inspector.

 

Disclosures

Make sure you receive and review Seller disclosures with your Realtor.  These may include the septic use permit, final occupancy permit, warranties, well records, surveys, condominium status certificates, and other documents pertinent to the property. Sellers may have completed a Seller Property Information Statement.  Material defects must be disclosed if known by the Seller and your Realtor will follow up and request this information.