The ins and outs of the legal document
How Offers Work
Once a prospective buyer is seriously interested in your house – perhaps after viewing it more than once – the next step is for them to put in an offer to purchase it. Perhaps you have decided to ‘hold back’ offers till a specific date, which is a popular strategy designed to limit the time your home is exposed to the market; collect all incoming offers at the same time; and create a feeling of urgency among buyers, who must submit their offers by the day and time you stipulate or risk losing out (this is how bidding wars are made). Or perhaps you have decided to welcome offers anytime.
Either way, once an offer has been registered at Jamie’s office by a buyer’s agent on behalf of a buyer, the buyer’s agent will shortly thereafter communicate it to you, with Jamie present as your advocate. Offer presentations can take place either at your home or at the office.
The offer will specify the terms and conditions of the buyer’s offer to purchase your home. We will go over all incoming offers very carefully together, in privacy, to make sure all the terms are satisfactory to you.
The Major Elements of an Offer
Offers to purchase real property are wordy documents, but they contain some simple key elements that are of great importance. Here are the key elements of an offer that you need to be aware of:
- Sale price: Depending on what price comparable homes for sale have been able to command, and whether or not there are multiple bids on your home, the price offered to you may be different from your original asking price.
- Deposit: The deposit shows the buyer’s good faith and will be applied against the down payment when the sale closes. Usually it is 5% of the purchase price.
- Conditions: These are qualifiers in the buyer’s offer that must be satisfied before a deal is legally binding. These might include ‘subject to home inspection’, ‘subject to the buyer obtaining financing’ or ‘subject to additional deposits’, to name a few examples.
- Inclusions & Exclusions: What the buyer expects you to leave at the house for them, vs. what you will take with you. Generally, this list is taken directly from what you have already stipulated on the MLS listing for your home, though a buyer might ask for more in the offer.
- Title Search Date: This is the last date the buyer’s lawyer has before the property closes, to search the title and make sure there are no problems or issues with the legal ownership of the property.
- Closing (Possession Date): This is the day the title to the property is legally transferred from you to the buyer, and the transaction of funds finalized.