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Congratulations! After a long process of scrimping, saving and searching, you have found your dream home. You have decided to make an offer. Now what? There is a bit more involved than dickering over the price of the house... The first rule buyers should remember is that no contract for the sale of real estate is valid unless it is in writing. There is no such thing as an oral contract to sell real estate. Therefore, both sellers and buyers must strive to obtain a written purchase contract. There are different customs with regard to the manner in which the parties reach that purchase contract. In many parts of New England, REALTORS use a fill-in-the-blank purchase agreement form to type in the terms of the offer. The buyer will be asked to sign the form once the terms of the offer have been completely written. If the seller accepts the offer, the seller will also sign the form. This form then becomes the written purchase contract. In other parts of New England, particularly Fairfield county CT, the realtor will use a "binder" or "offer-to-purchase" form to write the terms of the offer. The important thing to remember about offer-to-purchase forms is that these forms are not contracts even if the form is executed by the seller. In those parts of the state where offers-to-purchase are used, it is necessary to retain an attorney who will draft the terms of the purchase contract. This means that the seller has no legal obligation to sell the property to the buyer until both have executed the purchase contract, even though the seller may have verbally agreed to an offer or signed the offer-to-purchase form. For this reason, it is usually in the buyer's best interest to see that the purchase contract has been drafted by the attorneys and executed by the buyer and seller. Binder forms differ from offer-to-purchase forms and purchase agreement forms. Some places in New England use a binder form to write up an offer to buy. What's more confusing is that one type will become the purchase contract once the form is executed by the seller and the other type of binder form is no more than an offer-to -purchase bearing the binder label. A buyer should read the form, ask the REALTOR with whom they are working or the buyer's attorney if the form labeled as a binder is actually a contract. If not, the seller is bound not to sell the property even if the seller executes the so-called binder. And, as in the case of the offer-to-purchase mentioned previously, a buyer who spends money on the inspection of property does so at his or her own risk until the purchase contract has been drafted by the attorneys and executed by the buyer and seller. There are certain items that should be covered in any offer-to-purchase. Obviously, the sale price is critical, but there are other items equally important. The financing terms which the buyer seeks are very important and a vital part of any offer. Buyers can also select from a wide variety of possible inspections which can be performed on a property. These include building inspections, well water testing, septic system inspections, radon tests and a myriad of other types of inspections. Usually these tests must be performed at the buyer's expense. Finally, any personal property or fixtures associated with with the property which the buyer wishes to include in the purchase should be specifically set forth in the offer to the seller. Buyers wishing to make an offer on a property can obtain assistance from the REALTOR with whom they are working or their attorney. REALTORS are trained to explain the clauses contained in the forms which they use and to fill in the information required by those forms. The REALTOR can also provide information on constructing the offer which the buyer wishes to make. For legal advice or to review purchase agreements, buyers should seek the advice of their attorney. Lisa G. Governale has been director of communications for the Connecticut Association of REALTORS for the past ten years. Her articles on a wide variety of real estate industry topics have appeared in trade, professional and consumer periodicals and journals. Connecticut Association of REALTORS® |