Oral promises are not enforceable when it comes to the sale of real estate. Therefore, you need to enter into a written contract, which starts your written proposal. This written document will specify the price and all terms and conditions of the purchase.
If the sellers have offered anything in the Multiple Listing, be sure it is included in the contract. If they have offered to pay up to $3,000 in closing costs, and you don't write it in, you are not likely to get it. Once an offer is drawn up, normally using all the special forms of the real estate company it is then presented to the seller by the listing agent. In some areas the contracts are drawn up by buyer attorneys, however in the Virginia area, the contract is normally completed by the real estate agent.
If your offer says "Contingent upon (or subject to) a certain event, "you're saying that you will only go thru with the purchase if that event occurs. Some of the common contingencies in the contract may include:
a: The buyer obtaining specific financing from a lending institution. If the loan can't be located, the buyer won't be required to complete the contract.
b: A satisfactory report by a home inspector (within 10 days for example) after the seller accepts the offer. The seller must wait 10 days to see if the inspector gives the house a good bill of health. I can't over emphasize the importance of making sure all the details are nailed down in the written agreement.
When negotiating the contract with the seller, you are in a strong bargaining position - meaning you look great to the seller - if:
a: You are an all cash buyer.
b: You are already pre-approved for the amount of the offer you are making.
c: Your offer is not contingent on the sale of your existing home.
Earnest money is a deposit that you give when making an offer on a house. It is unlikely that a seller would place any value in an offer that is not accompanied by a healthy earnest money deposit. The deposit is generally in the $500 to $1000 range. One of the real estate agencies usually holds the earnest money and the holder is identified in the written agreement. At closing this money will be applied to the downpayment or other expenses that you may have.
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