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The Offer to Purchase
Once
you’ve found the right home, you will want to review the detailed
information about the contract offer. You and I will fill out a
contract for sale / offer to purchase stating exactly what you’re
willing to offer relative to price, down payment, deposit, financing,
inclusions and all other details. Although it may appear to be a
complicated contract, it typically is only 3 pages and will be
explained thoroughly to you by me personally. If there is any
portion that you do not understand, be sure to ask questions.
Items
on a Purchase Contract
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Date, name and address of
Seller and a statement that they are competent parties (legal age,
mentally competent, owners of the property); name and address of
Buyer and a statement that the Buyer is competent.
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Stipulation that Seller
provides title, free and clear of all liens and encumbrances (except
those you may agree to in the contract), that Seller or Buyer will
pay for the title search, that there are considerations that could
void the transaction, that earnest money be returned if clear title
cannot be provided.
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Purchase price (including down
payment) and how the purchase will be financed, including the
maximum interest rate Buyer is willing to pay for a mortgage; the
right to cancel without penalty if Buyer can’t get that kind of
mortgage financing.
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Length of time Seller and Buyer
have to accept offer if contract is to be valid.
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Closing and possession dates.
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Who pays which closing costs.
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Type of deed the Seller agrees
to give and conditions and provisions to which the deed will be made
subject.
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Termite and gas inspection
reports to be provided at closing.
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Fixtures and equipment that
will be included in the sale, including refrigerators, window
treatments, etc.
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Proration agreement outlining
division of taxes, water and sewage charges, premiums on existing,
transferable insurance policies, utility bills, interest on
mortgage, rent (if there are to be tenants).
In addition to the contract for sale / offer to
purchase, I will be filling out an estimated settlement expense sheet
for you. You will know approximately what your expenses will be
before you sign the contract, including all recording fees, appraisal
fees, location survey, title search, etc. After you have signed the
contract, I will give the contract to the listing sales associate,
who will present it to the Seller.
Sometimes
there are counter offers by the Seller indicating a change from your
original offer regarding price, exclusions, earnest money, or some
other detail of your offer. When terms are agreeable to both
parties, the Buyers and the Sellers sign the completed contracts.
Everyone receives a copy of the completed contract for sale / offer
to purchase.
Between
the time the contract is signed and the actual settlement or closing
is reached on the house, the Buyers and Sellers go through various
steps, including:
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The Buyer meeting
with the lender to apply for financing.
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An appraisal of
the house for the lender to make sure that the value of the house is
in accordance with the loan amount.
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The Buyer’s
financing is approved.
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The Buyers have
required inspections completed.
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The Buyers and
Sellers establish the date and place for settlement.
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The actual closing
is performed at a title company, bank or real estate office.
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