You have just found your dream house, and would like to buy it. What to do now?
When dealing with real estate matters, the law is clear: everything has to be in writing. Thus, you will need a sales contract, which will spell out all of the terms, conditions and special requirements you may (or will) need in order to conclude the transaction and go to closing (settlement) on the house.
If there is no real estate agent involved, your attorney should be able to assist you in preparing the contract offer. If there is a real estate agent, you can get a form sales contract from the agent. In fact, the agent should be able to assist you in preparing the document for presentation to the seller, although your attorney should review it before you sign.
Typically, the buyer makes a written offer to the seller. The seller has three alternatives:
1. The contract can be accepted;
2. The contract can be rejected in its entirety, or
3. The contract offer will be countered, with different terms.
It is rare that the seller will opt for alternatives one or two; in most cases, the potential buyer will receive a counter-offer. Then, the buyer has the same three alternatives.
There are certain things which must be included in any sales contract.
The property must be clearly identified, preferably by street address.
The contract must be contingent upon your obtaining financing. You should allow yourself some time — usually 30-45 days — in which to make application from a mortgage lender and get a written commitment that you have been approved for the loan. Under the new Consumer Financial Protection Bureau (CFPB), it will take more time, so you may want to give yourself up to 60 days in which to finalize the deal.
Unless you are an experienced contractor, it is advisable that you make the contract contingent on your obtaining a satisfactory home inspection. You should give yourself 5-7 days after the contract is signed to have the property inspected. If you are not satisfied for any reason after you receive a written report from the inspector, you should have the right to terminate the contract, and get back your earnest money deposit.