What an offer to purchase needs to have and what to expect

A buyer makes an offer by submitting a written and signed offer to purchase, which will become the sales contract when all terms are agreed to and ratified with everyone’s initials and signatures. Once the seller and buyer sign the offer, they are bound by the contractual conditions.

The listing agent will verify the capacity of the buyer to secure the property and will present the offer terms to the seller and act as their advisor.

The contract must contain the following information:

Date, name of seller(s), name of the buyer(s), property address, and the legal description of the property.
Amount of earnest money deposit, and whom will hold it in escrow.
Sales price
Size of down payment, and how the remainder of purchase price is to be financed.
Proposed settlement & occupancy date.
Name of the settlement company/attorney.
Contingencies, such as satisfactory review by attorney, structural inspection, appraisal, or sale of the buyer’s present house.
Other important provisions, including a list of items that convey with the sale, stipulation that title must be marketable and insurable, and who is to pay various settlement costs.

The seller will make one of the following decisions on an offer:

- Accept the offer as written.

- Make a “counter offer” on unacceptable aspects.

- Reject the offer, if it is totally unacceptable.

A contract exists when all terms including changes are ratified by initials and signatures of all buyers and sellers. When the contingencies are satisfied, the contract becomes enforceable.