The beginning of a sale.
When a prospective buyer makes a formal offer in the form of a "contract for purchase and sale," or "purchase and sale agreement," you'll probably feel a mixture of emotions: excitement that someone wants to buy your house, and fear that this multi-page contract contains hidden legal jargon disguised to "steal" your home!
Fear not, however, because the contract itself can't hurt you. It's just a pile of paper and ink. That is, until you sign it. Then it becomes a legally binding document. Which is why you should ask your real estate attorney to review any contracts you receive from any prospective buyers. While some people might tell you that you don't need an attorney, this is the only way your full interests will be protected.
Your attorney can guide you through all the elements of the contract, pointing out any contingencies, or conditions, that aren't favorable to you.
The contract is the blueprint or road map for the entire transaction. And because most everything is determined at this time, it's essential to involve your attorney early on to look out for your interests.
The basic elements of a contract include:
- Price and financing terms
- Date possession of the home will be taken
- Which (if any) personal property will be left in the home
- "Earnest money" deposit
- How the buyer will pay at closing: certified check or bank wire
- Common clauses: for instance, the buyers will want proof that you are the sole owner and have the authority to sell your home
- Contingencies, or conditions under which the buyer will purchase your home (see below)
Now that you have a purchase offer, what do you do with it? We'll walk you through the process:
Receiving an Offer
. What are the elements of a good offer? Should you accept the first one you get?
. A buyer may adore your home, but it won't be unconditional love. Find out more about these "escape clauses."