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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