Making the Offer to Purchase

The offer sets the stage for the entire real estate transaction. In short, you and the seller are agreeing to every stage of the process……in writing. The one thing to remember about real estate transactions is that EVERYTHING is negotiable…….this includes, price, appliances, time of possession, EVERYTHING. If you decide that it would be wise to offer the seller's full asking price, yet demand that they sing "Yankee Doodle Dandy" at your son's birthday party, you have EVERY right to make that offer. Believe it or not……real estate transactions can sometimes get that loopy.

Seller's Disclosure Form
The offer begins with reviewing the Seller's Disclosure information. Basically, the seller must reveal everything that he or she knows about the property in its past or present condition. This form list a variety of questions that the seller must answer regarding specific areas of the home (e.g. roof, furnace, plumbing, etc.) You may have already reviewed this form, as many are located inside various homes during the showing process.

In some instances, the seller may not know the answer to every question presented on the Seller's Disclosure Form. However, in such an instance the Seller must indicate on the form that he or she "Does not know".

Most likely you will be required to sign that you have reviewed the Seller's Disclosure Form. If you do not feel comfortable with the seller's knowledge of a few items on the Disclosure Form, consider having your Realtor address your concerns, in your offer (a.k.a. Purchase Agreement).

Lead Base Paint Disclosure
In addition to the Seller's Disclosure Form, you may be required to sign a Lead Based Paint Disclosure. Essentially, any home built before 1974, may have been painted utilizing lead based paint. The Seller(s) must reveal any knowledge that he or she may possess regarding the presence of lead base paint in the home. You then have the option to accept or reject a lead based paint inspection prior to closing. For more information regarding lead base paint, consider the EPA's booklet regarding lead in your home.

Purchase Agreement……the offer
Sooner or later, you will get to the actual purchase agreement. Traditionally, Realtors utilize a standard form in making an offer. Most purchase agreement forms were developed by a team of attorney's to help prevent any legal loopholes from jumping into the picture. If you'd like, feel free to ask your Realtor to give you a copy of the Purchase Agreement while you are still looking at various homes. That way when you find a home that you like, you will already be familiar with the purchase agreement form…..it simply makes the whole process a little less daunting.

In reality, the purchase agreement is a legal and binding contract designed to determine the means and process by which the real estate transaction will transpire. Everything is agreed upon in writing….and nothing is assumed.

Some of the aspects of the purchase agreement include:

1. Property address and legal description.
2. Purchase price
3. Means of financing (loan, cash, etc.)
4. Items to stay with the property……Washer's, Dryer's, Refrigerators.
(One note, in most cases anything that is permanently attached to the home is regarded as a "fixture". This prevents you from having to label every doorknob and window latch in your purchase agreement. However, check with your Realtor to be certain of what items stay with the home and what item go with the sellers.)
5. Inspections
6. Earnest Money

This aspect always seems to throw buyers for some reason. The earnest money is an amount that the purchaser provides to the listing broker to show that the offer is being made in good faith. When the offer is accepted by the seller, the listing broker must deposit the check into an account that neither the buyer, seller, nor the broker can draw interest upon. At closing the earnest money deposit is applied to your closing costs.

7. Closing and Possession Dates

The entire purchase agreement stage can seem overwhelming. At the root of it all is the art of negotiations….which is one of the reasons why you are working with your Realtor. Your Realtor is there to represent YOU.

Once you are through signing the purchase agreement, your Realtor will deliver it to the Seller's agent. All you have to do is sit back and wait for the….. page 5 of 10