Have you found the perfect house that fits your criteria and price point in the Vail Valley Area? Now it’s time for you to submit an offer! This is a very important process and I want my clients to know I will be by their side and help them through this. I want my clients to be educated on what to know about offer contracts. Keep in mind that a written and signed (ratified) purchase offer can bind both you and the seller. You may also see it be mentioned as a contract-to-purchase, an offer, binder, or earnest-money agreement. The seller can hold you to this offer once you have signed it.
An offer is a serious binding contract, which means the process can be stressful for buyers. I know from experience that no two houses or a way of placing an offer on a house are the same! But with my years of knowledge, experience, and training I am more than capable of guiding my clients through any offer.
Preparing An Offer To Purchase Contract
Well before we are ready to make an offer on a home a seasoned real estate agent will have done their homework on the house. They would have gathered data on the home. Which can be helpful when it comes to knowing the offer you should place on the home. Here is a list of some of the data I would collect to help my clients make the most informed decision.
- Information about the architect
- Information about the builder
- History of the home
- The floor area ratio (FAR)
- Can you add on to the home per town guidelines
- Is the home a part of an HOA
- The market value of other similar homes in the subdivision
- Information about adjacent lots around the home
- Where other neighboring homes could be built in the future
This data is all helpful in deciding on the price my buyers are going to offer. With this information available to my clients I feel very confident in moving on. To the next process of helping them make an offer on their future home. Make sure you take your time and think of anything you would like to be included in this contract. If you leave anything out of your offer contract and the seller accepts it, you’re out of luck!
The objective of an offer to purchase contract is to reach an acceptable agreement between the buyer and the seller. Then the agreement is signed with the intention of moving the deal forward. This is where a knowledgeable real estate agent will help you draft an offer agreement and will help explain this whole process to you. The identification of the property and price are the two most important features in the agreement.
What To Know About Offer Contracts And Writing The Offer Contract
In the state of Colorado, the offer is prepared using a standard Contract to Buy and Sell form. There are many areas that can be customized and filled in or left blank to generate the offer the buyer wants to submit to the seller. It is important to put your entity name or your full legal names as the buyer on the contract. Because this will be used by the title company. The title company will use this to draw up the closing documents and deeds.
There is also a section on the contract as to how you will take title to the property. If it is a couple buying the property they will usually be buying the home as Joint Tenants. While getting this contract prepared, you will want to include any little details that may need to be included in the contract. Some of the most important things for you to include are:
- The date and amount of deposit or downpayment
- Your name as a buyer and the property owner’s name as the seller
- The total purchase price
- Full legal description and street address of the property
- The lawyers, brokers, and others involved in the sale
- Terms and conditions of their compensation
- The options available to both buyer and seller should either party default
- Any milestone payments
The main terms of the deal are, as listed above but also not limited to, the time frame of the deal. Here are some examples, the time of the inspection, appraisal, and other time-sensitive items should be the highlight to provide the buyer and seller have an understanding of the process. These items can take time and you are on their company schedules and when they can be complete. Many sellers have specific qualifications or contingencies a buyer must meet when presenting them with an offer.
After The Contract Is Submitted
Once you have submitted your offer to the seller, they will either accept or reject your offer. Typically the buyer will place a reasonable time connected to the offer in order to motivate the seller to agree. Also, to control their offer. If the seller counters the offer, the seller or listing agent will send back a counter-offer for the buyer to likewise accept or reject. A counter could include changes or modifications to one or more components of the offer. Such as purchase price, closing costs, or a contingency.
There can be multiple back and forth counter-offers that go between the buyer and seller. Once the seller accepts the initial offer or the buyer accepts the counter-offer, it becomes a legally binding contract. Both the buyer and seller will work to meet the terms and conditions outlined in the contract. If the buyer and the seller can’t agree on all the terms laid out in the offer, there is no agreement or contract. An offer to purchase is an important contract that must be taken seriously. And once it’s finalized you are the proud new owner of your dream home!
Final Thoughts How Can I Help?
I hope you have found this article helpful when it comes to understanding Offer Contracts and the process that goes into purchasing your dream home. If you have any additional questions about what you should know about offer contracts please feel free to reach out and contact me! I want to provide my clients with interesting and up-to-date information so they can make informed decisions. If you think that my expertise and positive attitude might be of service to you don’t hesitate to reach out and contact me.
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Coldwell Banker Global Luxury Specialist
Coldwell Banker Distinctive Properties