The purchase and sale contract is the initial offer that a buyer will make to a seller that states how much they're willing to pay for the property, how much earnest money they're willing to put down and the terms of the agreement. The seller must agree to all the terms or make a counter offer. Once the buyer makes a written offer to the seller the seller has three options: they can accept the offer as is, they can reject it entirely or they can counter offer with different terms or prices. In most cases, the seller will counter offer if they are not satisfied with all of the terms of the agreement. It is an up to the buyer to decide if they want to counter offer again, accept or reject the offer.
There are certain things that must be included in the purchase and sale contract.
- The contract must state to the property identification such as the street address.
- The contract must include financing options, either cash out or financing.
- The contract must state how much the buyer is willing to pay for the property and the earnest money deposit.
- The contract must state when the buyer wants to close on the property.
These are the primary items that the purchase and sale contract will include but they may also include other addendum's and contingencies such as the contingency on a home inspection which is highly recommend it. Buyers have the option to waive the inspection and not worry about it at all, which is very appealing to sellers, but not always the smartest idea for buyers. All homes should be inspected so that you're not buying a property you know nothing about.
Other contingencies could include a financing contingency. With this contingency closing usually takes at least 30 to 45 days. There may be other contingencies such as a feasibility or neighborhood contingency. This allows time for the buyer to investigate the neighborhood or the integrity of the property itself for future use. If all the contingencies are satisfied and go through, the property can move on to closing. Most contingencies are time sensitive and buyers and sellers have just a few days to complete the requirements.
You can see why using a buyers agent to help facilitate this can make some of the legal requirements a lot more understandable. Not understanding what you're signing or how to even go about writing up a purchase and sale contract could cause a lot of issues, problems and legal ramifications. It really pays to use a real estate agent during any property transaction.
For more information on real estate contracts or to set up a real estate contract on a property of your choice in the Portland area please contact our office today.