Contract Tip Sheet
Right At Home Daily: Take It And Run: Legal
By Samuel J. Tamkin
In some states, it’s called a "purchase and
sale agreement." In others, it’s called an "offer for purchase."
Whatever you call it, you’ll need a written contract
between you and the seller that contains the following important pieces of information:
Your name, the seller’s name, the address of the property, the selling
price and the closing date.
Of course, most contracts are more complicated than that.
Here are some things to think about when putting together an offer for purchase:
1. Put it in writing. If you don’t
have a contract that’s written, and signed by the parties, it’s
not enforceable. If the seller refuses to put it in writing, you don’t
have a deal.
2. Itemize what appliances and other items
are included in the deal. If you want the washer/dryer, you need to write
that in. In fact, make sure you individually list all items you want to
stay with the home, such as a refrigerator, stove, window air conditioners,
carpeting, bookcases and cabinets, built-in shelving, planted vegetation,
etc. Otherwise, the sellers may take the item when they move.
3. Add the proper contingencies. A contingency
allows you to back out of the contract for a specific reason. If you make
your offer contingent upon a satisfactory home inspection report, or on
the sale of your current residence, that means you can back out of the purchase
if the property flunks the inspection or if you can’t sell your home.
A contingency protects you, which is why you want to have it in your contract.
Typically, home buyers have an inspection contingency, a financing contingency
(you can back out if you don’t get your financing), and an attorney
approval rider. If you’re buying a condominium or cooperative apartment,
you’ll want to make sure your offer is contingent on being approved
by the board, if approval is required.
4. Don’t forget your earnest money. Sellers
like to get a check (even one for $1,000) with the offer for purchase because
it shows them that you, the buyer, are serious. But don’t write a
check for the full amount you intend to put down on the property. You’ll
want to hold onto those funds just in case something goes wrong. Typically,
buyers will increase the earnest money as various contingencies have been
satisfied or expired. Never make the earnest money payable to the seller.
An intermediary (like a broker) should hold the money.
5. Don’t gunk up your offer. In a
hot seller’s market, sellers are more likely to reject an offer that
contains too many contingencies, or asks for too much. Asking to have the
lawn equipment included in the purchase price may or may not be reasonable,
depending on the price you’re paying for the property.
6. Timing is everything. While price is
certainly important, other issues may be equally critical to a home seller.
For some home sellers, when they close may be more important than netting
a few extra dollars for the sale. Be sensitive to the seller’s need
for flexibility when it comes to choosing a closing date.
