Are you thinking about buying a home? The days of buying real estate in Sarasota with a hand shake are long gone. I hear stories from some of the old time Realtors about how they used to do that.
The first thing to remember about making an offer is that the offer is a legally binding contract. Make sure you read and understand what you are signing and not include anything in the offer that you are not totally comfortable doing. If you are uneasy with writing an offer make sure you have help. You can hire a real estate attorney, title company or Sarasota Realtor represent you and write the offer for you.
As far as real estate goes everything has to be in writing. If you or the seller said something verbally about buying the property it is not binding. Offer usually includes:
- Purchase price – This is price you are offering to buy the property. Remember, that the seller can counter offer with a higher purchase price.
- Concessions – This includes things that you are asking the seller to pay for. Examples, would be various closing costs like title insurance, attorney fees, bank fees etc.
- Conveyances – What personal property goes with the sale? Do all of the appliances stay? How about the washer and dryer? If you like the patio set on the pool deck you can ask to have that thrown in with the sale of the house.
- Escrow deposits – You need to put money into an escrow account to make sure you hold up your end of the bargain. Can you imagine if the seller hired a mover, pack up their home on a truck and moved to their next location and you just decided not to buy the house? If you don’t follow through with your end of the contract the seller needs to be compensated. That is what the escrow deposit is for. Some buyers want to tie up a property for a small amount of money. Frankly, I think sellers are crazy to accept an offer with something like $500 or a $1,000 in escrow. Hiring a moving truck alone is probably several thousand dollars.
- Home inspections – If you buy a home then you should have it inspected. Most real estate contract include a contingency that allow the buyer a certain amount of time to inspect the property. The Florida Association of Realtors contract that is widely used gives buyers 10 business days from the effective date.
- Mortgage contingency – This is the period of time where the buyer has to obtain mortgage financing. If the contract states that the buyer has 30 days to secure financing then they need to arrange financing within that 30 day window and they can only cancel the contract within that 30 day period if they cannot obtain financing. If you make an offer to buy a home in 60 days with a 30 day financing contingency then you cannot cancel the purchase agreement on day 59 when your lender rejects your financing.
- Acceptance – This covers how long the seller has to respond to your offer before the offer is no longer binding.
- Closing date and location – This is when and where the transaction will close/finalize. This is when the seller receives their money and turns over ownership of the home to the buyers. Most contracts don’t have the exact location of the closing, only the county. For example, in the FAR contract widely used it states that the closing will be held in the county where the property resides.
- Title Insurance – The contract usually stipulates who is going to pay for title insurance. Different locations within Florida have different customs. In Sarasota it is customary for buyers to pay for title insurance. However, this is still negotiable.
These are the highlights of a purchase offer when buying a property. You will find different types of agreements with different stipulations. Some agents like to use one type of offer while another agent will use a different type of agreement.
