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May 2008

The Difference Between an "Offer" and a "Contract"

In every real estate transaction, there is a written set of "instructions" called a "Contract of Sale" or "Purchase Agreement."  It is the document signed by both buyers and sellers, and contains details of their agreement.

The contract begins as a purchase "offer," and contains the terms of sale proposed by the buyers.  This includes the "offered" price, the terms of payment, a closing date, the possession date, and other information.  It may also spell out what personal property, if any, is to be included in the purchase price.

If accepted by the sellers, this document becomes a binding contract.  If not, negotiations will continue between buyers and sellers until agreement is reached.  At that point the acceptable written document becomes binding on both sets of parties.

The contract then becomes the basis for all further activities leading up to a final closing of the transaction.  Attorneys, mortgage lenders, surveyors, title companies, and others involved all work to carry out the terms of that written document.

Because of the many details involved in a real estate sale, all agreements must be in writing to be enforceable.  If they weren't, the slightest disagreement between buyers and sellers could cause an impasse, possibly resulting in a "no sale."

It is very important that both buyers and sellers are certain their agreement reflects their intentions.  The time for negotiation is before the contract is signed, not after.

If the sellers want to dig up their prize rose bush and take it with them, even that should be included in the contract. When in doubt about whether an item is to be included in the sale, ask your real estate professional for a clarification, and then include it to be sure.

Contracts and real estate go together.  They assure both sellers and buyers of a smooth closing, and a satisfying real estate transaction.

12:02 PM - May. 27, 2008 - comments {0} - post comment
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A Good Deed is Vital

Whether buying or selling real estate, you will eventually come face to face with the one document which transfers title from seller to buyer - the "deed."  The actual transfer of ownership officially takes place when the deed has been "signed, sealed, and delivered" to the purchaser.

Historically, under English common law, the transfer of real estate took place in a ceremony called "livery of seizing."  The owner would meet the purchaser on the land, and hand over a twig or clod of dirt.  Although a written statement of the sale followed, it was the ceremony that signified a sale had taken place.

Today it is the written document, the deed, which marks the conclusion of the sale.  It is said that the seller is the "grantor" in the sale - granting all rights and privileges of ownership to the purchaser.  The buyer is known as the "grantee."

To be valid, a deed must be in writing, and name both the grantor(s) and grantee(s). It is signed only by the grantor(s), however.  Furthermore, the grantor must have the legal capacity to convey ownership.  Having legal capacity means that the grantor is of legal age to make a conveyance, and is of "sound mind."  Since both minors and insane persons can avoid their contracts, no one should propose a transaction that includes them.

Deeds should be drafted by an attorney.  A good deed also contains a "legal description" of the property being conveyed.  The property must be described so as to leave no doubt about exactly what real estate is being transferred.  It must also contain certain legal conveyance language.

This important document should be recorded, and then kept in a safe place.  It is the buyer's sole proof of ownership. 

8:46 AM - May. 17, 2008 - comments {0} - post comment
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Gains & Concessions...The art of the deal!

Whether you are the buyer or the seller, negotiation skills are crucial to a successful real estate transaction.  You’ll find that a real estate agent provides the experience, tools, and skills necessary to “strike a deal” with the other party, other agents, and other professionals who are all involved in such a transaction.

Every negotiation should follow a step-by-step formula, beginning with preparation and ending with a proposal that has been accepted by all.  It’s best to spend most of your time on the “preparation” phase, since this will greatly reduce the time and stress involved in the “bargaining” phase down the road.

The proposal, or Offer To Purchase, is produced when the buyers have done their “prep work” and the sellers can now begin bargaining if they choose.  This is where it’s very important for both sides to have a clear understanding of all the aspects involved, and you’ll want to be sure to have the experience and training of a real estate professional to promote your best interests.

Bargaining or negotiating is all about gains and concessions, and the more educated you are about both sides of the transaction, the better your chances are to reach a nice, smooth, mutually acceptable conclusion.  While all the decisions are ultimately yours, doesn’t it make sense to have a real estate professional on your side?

12:51 PM - May. 4, 2008 - comments {0} - post comment
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