Purchasing foreclosed properties rather than short sales have various benefits and drawbacks. Tips for first-time homebuyers are included below.

Many home buyers want to get a great real estate deal in this extreme buyer’s market by buying smart. After all, the motto “buy low and sell high” stands true, especially in these down economic times. But unfortunately, buyers can be confused about the difference between a home foreclosure, bank-owned and a short sale. Plus, these terms are frequently misused.

Listed below are the definitions and the comparisons for buyers to make an informed decision on which to purchase.

A foreclosure occurs when the priority lienholder reclaims or repossesses the property. It is now bank-owned. This entity is usually a significant bank, loan company, or mortgage company. The bank, loan company, or foreclosing institution has usually paid any liens or debts attached to the property through the legal process.

Buy properties for less than you owe and receive less for them; this is referred to as a short sale, meaning the seller bought the house initially for, let’s say, $200,000, it has a current loan balance of $150,000, and the market price has now crashed to $100,000. So the home will have to be sold $50,000 “short” of its original loan balance with bank or loan company approval.

Foreclosure vs Short Sale

Transaction time: foreclosure – 30-60 days. A short sale is 60 days to one year.

Price: foreclosure – rock bottom. Short sale – low, but statistically not as every day as foreclosures.

Liens/attached debts: foreclosure – usually satisfied through the legal process. Short sale – possible obligations that new buyers might have to assume, but the current owners are required to disclose if they know about any.

Negotiations to purchase: foreclosure – bank or loan company. Short sales – the current owners of the property and their bank, loan company, or mortgage company.

Condition of the home: foreclosure – typically poor. Short sale: usually good to fair.

Ease of inspections: foreclosure – brutal, as the utilities are not usually on, and the banks aren’t excited about paying to turn them on. A short sale is pretty easy, as the owners are generally still in the home with utilities.

Buyer requested repairs: foreclosures – only material defects. Short sales – possible if current owners are willing to pay for them.

Occupancy: foreclosures – usually vacant. Short sales – usually occupied

Headache factor (scale of 1-10). Foreclosure – 5-6. Short sale – a 10.

Hopefully, this gives buyers a quick picture of what to expect, and from this, they can make a purchase decision armed with information and knowledge.

Good luck!

It’s not simple for folks with a low credit history to get on the housing ladder. Therefore, if you’re attempting to purchase a home with adverse credit, the following tips may be beneficial.

Past credit problems mean that your application will be declined or the cost of borrowing will be higher. However, when you’re trying to buy a house with bad credit, you can do a lot of things to make it much more likely that the lender will accept you.

Home financing for bad credit is still available from specialist lenders, but their numbers have dwindled recently. If you have a history of poor credit, you’re going to need to prove that you’re committed to purchasing a property and have the means with which to do so.

How to Improve Credit and Buy a House

If you’ve damaged your credit, this will show on your credit report for six years in the U.K. and seven years in the U.S. Before lending you money, a lender will perform a credit search, and this will reveal any past indiscretions. In addition, it allows lenders to categorize the risk you present to them.

Don’t despair, as you can do things to fix your credit report. The first step is requesting a copy of your account from all three credit reference agencies and checking them for erroneous information. You should also pay your existing debts on time, enhancing your creditworthiness.

It may take longer to recover than for others for specific credit issues. Therefore, before house buying with bad credit, it’s advisable to make timely payments on existing debts for a minimum of six months. The longer the period since you defaulted, the less interest you’ll have to pay on loan.

Homebuying with Bad Credit? Bankruptcy Loans

Many first-time home buyers want to know how to buy a house with bad credit and no money down, but it’s going to be very difficult to do so for the foreseeable future. Financial institutions got burnt when the property bubble burst back in July 2007. Regulators are now closely monitoring the lending activity of the banks.

Statistics by Halifax revealed that the average first-time homebuyer provided a down payment of £28,770 during 2010, the equivalent of a 21% deposit. There are mortgages for bad credit scores for people who can only raise a small down payment, but the monthly payments will be higher.

The reality is that house buying with bad credit becomes a lot easier when you can provide a larger deposit. In addition, it protects the legitimate financial interests of the banks because, if you default on the arrangement, it’s easier for the bank to recover its money should it need to repossess your home.

Pay Down Personal Debt Before House Buying with Bad Credit

If you have poor credit, it’s a good idea to pay off your obligations before shopping for a home. The less obligation you have, the more disposable income you’ll have to pay your mortgage. Affordability is critical to the banks because you’re statistically less likely to default on the agreement terms.

Buying a house with bad credit is a serious, long-term financial commitment. It is more probable that you will be able to pay your debts if your income-to-debt ratio is lower. All mortgages for bad credit scores are a risky proposition for the lender, but lower debt puts you in a far better position.

Professional real estate agents and brokers want your business and will gladly give you valuable information on the current market to get it.

Since you need plenty of market information to price your home right, you will inevitably run into a real estate agent or broker in your search for facts and figures. But, according to a 20-year veteran of the industry at Rockwood Real Estate Consulting, you should know a little about how to deal with the people who sell homes for a living.

Free Market Evaluations Provide Valuable Information

Professional sales agents are paid commissions based on the sale price of your home. They qualify for that commission if they ‘list’ your home. ‘Listing’ your home means they get you to sign a contract where they agree to market the house and show it to prospective purchasers. If they sell the home during the ‘listing’, you agree to pay them a percentage of the sale price. In a competitive market, these agents must compete for ‘listings’, and they often offer to give prospective sellers ‘free market evaluations’. Those market evaluations can provide you with a wealth of valuable information, and you should not hesitate to take advantage of their offers if you are considering selling your home.

If done correctly, that evaluation will involve two visits from the agent. On the first visit, they will come and gather basic information about your home – its size, age, condition, location, number of bedrooms and extra amenities. Next, they will take that information to their office and find comparable sales using their access to detailed figures from the local real estate board. Then, after seeing the appropriate comparisons, they will again visit you, bearing the results of their work.

It would help if you didn’t tell the agent or broker what you feel the house is worth or your expectations of its value. However, you must allow them to remain objective and not influence their numbers. Be clear with them that you are considering selling and only doing your ‘due diligence about market research. You might inquire about their perceptions of the local housing market. As professionals, they should be able to answer your questions about that market and should be willing to do so to earn your trust – and your business.

This ‘free market evaluation’ is a ‘listing tool’ for professional salespeople and part of their business. You don’t have to use their service, and you can make it clear to them that you are just doing preliminary research. It would help if two or more different agents conduct market evaluations for you and make each one aware that they are not the only professional you have consulted. An excellent real estate agent or broker will welcome the opportunity to evaluate you and thank you for it.

The Right Comparisons for the Right Price

If the evaluations are done correctly, they will include the ‘listing’ information on several homes that compare closely to yours that have SOLD recently. The homes should be of the same approximate size with the same amenities and in the same or very similar neighbourhood. Comparisons should be made against a minimum of three or four examples, depending on the market activity, but they must be SOLD homes. Looking at the prices of homes listed for sale can be very misleading, as those figures do not accurately represent the marketplace but are instead a variety of other people’s ideas on what the market should be.

By examining the information on the sold listings and comparing it to the information you have on YOUR home, you should be able to get a pretty good idea of the current value of your place. 

If you wish, you can inform the agents or brokers who evaluated your decision to sell privately and offer to co-operate with them if they find you a buyer. They may have an arrangement with their buyers, who may be paying the brokers to find them the perfect home – and maybe it’s yours!

By getting all the information from the professionals and pricing your home right, you will look like a realistic and severe seller – and that is an excellent way to enter the housing market. It is a competitive business.

Real estate can be unpredictable and will not consistently profit the average homeowner. The typical homeowner may expect to recoup their investment. It means they will have lived rent-free for however long they resided in their home. However, there are several things a person can do at little to no cost that will increase the sale price.

First Impressions

Appearances contribute to a significant factor when selling a house. Taking the time to do a little landscaping, cleaning the walls, and steam cleaning carpets go a long way towards increasing property value. In addition, a clean, fresh-smelling house will always help open a buyer’s wallet. One trick to creating a fresh scent of mixing one part water with one part Pine-Sol in a spray bottle. Spraying this mixture a couple of times throughout your home will positively respond to any potential buyer.

Space Control

The bigger the house, the more money you can expect to get. Unfortunately, there’s not much you can do to make an empty home look bigger; however, if you are showing your house while still living in it, then a few tricks can create the illusion that your rooms are more significant than they are.

Prospective buyers like to imagine what a house will look like with their furniture, so having your personal effects around will help with this. Keeping a tidy home when selling is common knowledge, but try keeping most of your stuff organized and out of sight. It reduces the clutter and allows for a more open area to be seen.

Moving furniture against walls will also open the floor space up. For example, if you have a flat-screen TV, consider spending the money to mount it on the wall. TVs and the stands they sit on take up any dead space. Mounting a TV can add at least 15 square feet of floor space. It may signify a lot, particularly to a buyer with a family.

Some people decide that having a yard sale would help clear many possessions before moving. It is a good idea but may not be the answer to freeing yourself of your worldly possessions. If holding a yard sale turns out not to be as successful as you anticipated, and throwing away this stuff is not an option, then you can look into renting storage space.

While renting storage space is not a very common practice when selling a home, it does have several benefits—moving what you can into storage forces you to prepare for your actual move Before the last minute. Also, clearing out extra items that you can do without for a while will open up rooms, closets, and garages.

A garage is a commonplace that homeowners decide to use for storage. So having a clean garage will help improve a buyer’s offer. The same goes for closets. How much of the material in your cabinets have remained unopened since you moved here? Put these items in storage if you think you can’t part with them. Closet space is a crucial consideration when purchasing a property. A well organized and free of clutter closet will show a buyer exactly how much space there is.

Walls and Floors

Everybody has been advised to repaint walls and replace the carpet in a home they are about to sell. Of course, you won’t be given the same old suggestions here, but you will be asked to consider taking this advice to the next level.

A fresh coat of paint is an easy and relatively inexpensive way to give your house a new look, but a buyer will be expecting this. As long as the aroma of freshly painted walls can be detected throughout the house, why not use a two-toned colour scheme? Using two different types of colour on your walls takes a little more experience than simply repainting a room with one painting. However, it will show a buyer that you put a little more effort into selling your home, and they may believe that you hired a professional painter to make this happen.

Replacing your carpet is one way to add value, but everyone knows this trick and clean floors are expected by most home buyers. The way to take this approach to a new level is by changing the type of floor you currently have. If replacing the carpet is something you already plan on doing anyway, why not upgrade to a better floor type? If your bed has tile presently, then replace it with carpet. If carpet is the material being returned, go with a wood floor. The added value that a new floor type will bring will typically pay for the replacement and perhaps more.

Driveways and Garages

It is an area of your property that is usually overlooked. If there are oil spots or other stains left from your vehicle or outside activities, then take time to clean them off. The most straightforward technique to remove dirt is to use a power washer. These are pretty standard pieces of equipment, but if you don’t know anyone who has one to borrow from, then check with your local hardware store. Hardware stores usually have construction equipment for rent at a reasonable price.

If rental prices are too expensive for you, then take a look down the aisle with washers for sale. Pressure washer prices have become very reasonable over the years, and a homeowner can find many uses for owning one of their own. For instance, they are helpful when washing cars, cleaning off the siding to a home, and maintaining BBQ grills. Of course, there are more uses, but these seem to be the most common.

Wood Staining

Wood staining is the last idea that someone would consider when trying to improve the value of their home. It is a skill that many have never attempted but is very easy to do. While the process may take some time, the results are worth the wait. A few of the items which can be stained are kitchen cabinets, doors, closets, door frames, baseboards, and window frames. Considering almost everywhere you look in a home has areas that can be stained, the new and fresh look may be worth your time to think about.

Here are three steps for worried sellers to find the lowest price they can handle to cover real estate commissions, mortgages, and possible buyer closing costs.

A few essential steps must occur for someone considering selling their home before going on the market to set a reasonable asking price. First, working with a listing real estate agent can be very useful for two ways to determine an affordable starting price. First, real estate agents can offer a CMA (comparative market analysis) to help determine a potential fair market value for a home based on comparable properties with similar features that have sold or are currently active on the market in the local real estate market. In addition, a simple three-step math tool called the “Net to Seller” can help owners identify the minimum accepted sales price that will be acceptable to cover their expectations and needs.

How to Determine the Minimum Sales Price of a Home With “Net To Seller”

Step 1: Determine how much money is still owed on all lent monies related to the home (remaining balance on first and second mortgage). Add any additional money for savings or a down payment on another home. It is your first value of “money needed.”

Step 2: Deduct from 100% the percentage amount that will cover real estate commissions (these values are not “preset” to avoid anti-trust laws and are forbidden to be pre-typed on a selling agent contract form). This percentage must be negotiated in every transaction with the listing agent. Still, most real estate agencies have a company standard and will and must disclose this amount before signing any agreement. A listing agreement with the listing agent must be in writing before putting a house on the market with a real estate agent.

Step 3: Take the remaining mortgage value cash total and divide it by the percentage remaining from Step 2 to get the desired final negotiated sales price.

Note: If the seller anticipates other pay-offs at closing, such as contributing a percentage of the sales price in buyer’s closing costs, subtract that as well from 100% in step 2 before going on to step 3.

An Example Scenario to Determine a Minimum House Sales Price

Let’s imagine that the Smiths want to sell their home. They have an outstanding first mortgage of $200,000 and a second mortgage of $70,000 (they avoided paying extra mortgage insurance by doing a 70/20 mortgage back in the day). They anticipate paying 6% in real estate commissions (split between the listing agent and selling agent working with the buyer). They want to break even and don’t need any additional savings.

Step 1: Remaining mortgage debt

200,000 +70,000 = 270,000 (remaining house debt to pay off mortgages)

Step 2: Percentage of commissions subtracted from 100%

100% – 6% = 0.94

Step 3: Divide anticipated money needed / 0.94

270,000 / 0.94 = 287,234 final needed sales price

A Slightly More Advanced Example with Closing Costs and Additional Savings for the Next Home

The same scenario with the Smiths, but add in need for $25,000 for savings for a downpayment on their next home and contributing 3% to closing costs for their buyer as an incentive to sell the house. Here are the adjusted calculations.

Step 1: Money Needed For Mortages and Savings

200,000 +70,000 + 25,000 = 295,000

Step 2: Percentage of commissions and closing costs subtracted from 100%

100% – 6% (commissions) – 3% closing costs = 0.91

Step 3: Divide antipated money needed / 0.91

295,000 / 0.91 = $324,175

The benefit of Knowing the Necessary Sales Price (Net To Seller) to Break Even

This simple three-step exercise will help relax sellers of future closing earnings on the sale of their home. It will also help them to determine additional issues such as if they are at risk for a short sale (owing more than selling will cover) or if alternative considerations may be a better solution (waiting to sell, placing a home on the rental market, selling by the owner to reduce commission fees, until the situation turns around).

Every situation will be unique, and talking with a listing agent on a seller’s side will help with all these concerns. Another consideration is that any unpaid property tax, construction liens, or personal tax liens will also have to be paid at the home’s sale and added to necessary expenses. During negotiations with a prospective buyer, sellers will be able to make decisions and have a pre-determined plan before in the heat of the moment in negotiations. It is always easier to plan before the pressure of the sale.

Binding buyer and seller to an offer to purchase a home requires legal written bids and proper agent communication protocols to confirm acceptance.

There are essential elements to create a legally enforceable contract between two parties. Still, there are also crucial protocols that must be followed between the buyer, seller, and both real estate agents to solidify the creation of a legal contract. If these steps are correctly followed, both parties will be protected from the other party backing out of an offer leading to great disappointment for all involved.

When a potential buyer views a desirable home and has determined how much house they can afford and pre-qualify for a mortgage, performed a CMA (comparative market analysis) to determine a fair market value for the property with a real estate agent representing their interests, and has signed a buyer’s agency agreement to protect their confidentiality during negotiations, the time has come to draw up an offer to purchase document.

Binding a Party to an Offer to Purchase in Real Estate – Acceptance and Communication Requirements

If, in a typical scenario, a person makes an offer in writing with a real estate agent on a home they desire to buy, several vital steps must occur to make this official. First, a formal offer to purchase form must be drawn up with a licensed real estate agent and signed by the potential buyer.

Next, the buyer’s agent (or often called the “selling” agent) must present this offer in writing to the homeowner’s agent (called the listing agent). This offer cannot be “illusory” in nature or have vague details about items such as financing or closing dates. Next, the seller must receive the request from the listing agent and communicate to their agent that they accept the offer and all the terms and sign the offer and give it to the agent. It is considered poor practice for a listing agent to call a buyer or a buyer’s agent to notify that a seller has “accepted an offer” without visually confirming the offer is indeed signed by a seller.

Until the seller signs the form and their agent communicates to the party making the offer that the seller has signed the document and officially accepted the offer, the buyer can still back out at any time. If an owner signs the form late at night to sell, but their real estate agent does not notify the buyer or the buyer’s agent until the morning, technically, the offer could be removed, and the buyer could change their mind. Or, if a buyer is notified by their agent that a seller has “accepted their offer,” but the seller has not signed the form, the seller could still change their mind and back out as well.

Counteroffer Considerations When Making an Offer on a Home as a Buyer

Counteroffers also serve as a point of confusion in the process. A counteroffer is technically the rejection of the initial offer and therefore requires a separate contract to be submitted with new terms. Due to timing issues with multiple bids submitted to a seller, it is essential to understand.

If a seller rejects an offer’s initial terms and counters with a different price or other words, that contract is vulnerable to other proposals submitted. If another request is presented with the same terms as the counteroffer from another potential buyer, the first buyer may lose the property. The seller maintains the right to accept another offer while the first party still considers a counteroffer, even if the counteroffer states a deadline time to respond.

A counteroffer is not an exclusive right to buy scenario, and buyers should be aware of this when considering a counteroffer from a seller. It would also be in the buyer’s best interests to place a time limit on offers to be accepted to avoid a seller sitting on one provide while waiting for others to come in. A proposal to purchase is terminated once a seller rejects the current terms of an offer or fails to accept it within a prescribed time by a buyer.

Understanding the Role of Real Estate Agents in Communication Between Buyer and Seller for Offers to Purchase a Home

An essential concept in this portion of real estate is that real estate agents and their clients “walk in the same shoes.” It means that any communication to an agent or the client (their “principal”) is viewed the same. So, it doesn’t matter if the seller or the agent representing the seller (listing agent) communicates with the buyer or the buyer’s agent (technically the “selling agent” even though they represent the buyer); the legal requirement of acceptance and communication is finished. Overall, everyone is more protected once the document is signed, delivered and officially created the contract.

Suppose a buyer refuses to use a buyer agency agreement before submitting a written offer (a decision strongly discouraged to do for the buyer’s best interests). In that case, the agent working with the buyer has to be a “subagent” of the seller and communication with this agent also does not legally cross the line of two parties. The agent’s payment with the buyer is the same in either scenario (usually by the seller); the difference is which party that agent owes loyalty to.

If the seller subagent option is elected (meaning the buyer refused to sign an exclusive written buyer agency agreement), then the buyer must be communicated with directly to be considered accepted by the seller legally. This technical detail may often go overlooked in this scenario. It is yet another example of how a buyer’s interests are not protected without a buyer agency agreement, as their agent extends the seller in this legal aspect.

Legally Acceptable Forms of Communication Between Buyers and Sellers and Their Agents to Create Contract Formation in Real Estate

Acceptance can be communicated in many ways: either verbally (orally), by mail, email, fax, or old-fashioned days as a telegram. In addition, a law called the UETA (Uniform Electronic Transmission Act) allows electronic communication and even electronic signatures (such as writing one’s name at the bottom of an email) as legally acceptable.

One exception is text-messaging, as according to the UETA rules about electronic signatures and communications, text messages are not considered an option of transmission. Therefore, as a practice, if texting is to be used, other forms of communication need to be immediately initiated to complete the process legally.

Also, the process of a seller mailing the signed offer to the listing agent (or seller subagent if the buyer does not have a buyer agency agreement) does not count as communicating acceptance, as the threshold to the buyer or buyer agent has not been crossed; legally that is considered communicating with the same person or entity.

The mailbox rule in effect in real estate transactions means that the moment the signed contract with a proper label to the other party is placed in the U.S. mail (by the mailbox or post office), the contract is legally formed at that moment. An offer by a potential buyer can state-specific ways to be notified by acceptance, such as only electronically or only by mail if desired.

Due to the critical protocols in creating a bound contract from an initial offer to purchase, buyers and sellers should always consider the numerous benefits of a licensed real estate agent protecting their interests in real estate. All the same, protocols would apply with a sale by owner (FSBO) between a buyer’s agent and the seller listed above, minus the listing agent’s participation. Without representation, many opportunities for losing negotiation footing and best interests may occur through this complicated process, the buyer due diligence period, and closing as well.

Real Estate Contracts: 5 Essential Legal Elements to Enforce Law

Learn five essential elements for an offer to purchase a home to become a legally enforceable contract and mistakes to make a real estate contract voidable.

Although real estate contracts are increasingly more elegant and complex (such as the newly revised 2-T Offer To Purchase And Contract in January 2011) for licensed realtors in residential real estate, the basic legal requirements for a valid contract are still the same. Therefore, anyone involved in real estate should be aware of the five legal requirements of an agreement not to lose sight of the big picture while focusing on minor details in the process of purchasing a home, in addition to the basic protocol of accepting an offer and communicating effectively to create a legal contract.

Real Estate Contracts: Definitions of Types of Contracts and Forms that Exist

A contract, by legal definition, is an agreement between two people that is legally enforceable (the most common example in real estate is a contract to purchase). Contracts in a general discussion can be “express” in words (either written or oral) or “implied” from suggested conduct (such as ordering a meal in a restaurant with the knowledge that protocol implies a check and payment will follow). Contracts are often considered “express” in real estate ” in writing.

A rule called the “Statute of Frauds” requires important real estate events (such as the buying/selling or transfer of conveyance/use of property) to be in writing to be legally enforceable in court. It includes all offers to purchase and leases in North Carolina longer than three years (i.e. three years and a day). Therefore, a lease less than three years is still wise in writing but is not considered invalid or wrong if it is oral.

Also, contracts by nature can be executed (completed/done) or executory (still waiting to complete). By definition, a contract to purchase a home is still executory until closing, and more options are present for leaving or exiting an agreement. However, once closing has been completed on a property, an executed contract is legally solid and difficult to escape (unless significant signs of fraud apply).

Lastly, real estate contracts can be considered “bilateral” (actions expected of both parties – the most common scenario in real estate) vs “unilateral” (where only one party is obligated to perform). The best example of a unilateral agreement in real estate is the “option to purchase,” where the buyer has the option to act, while the seller is required to serve if the option is selected.

Real Estate Contracts – The Five Essential Elements to Create a Legally Enforceable Agreement

Despite the multitude of pitfalls and dangers left open in real estate with a simplistic real estate offer to purchase, in a court of law, there are genuinely only five elements needed to create an agreement:

• mutual assent (meeting of the minds)
• consideration
• legal capacity of both parties
• the lawful objective of the contract
• in writing

Mutual assent means that the buyer (offeror) and the seller (offeree) agree to all the terms and thoroughly understand the contract’s property, price, and duration. Therefore, no additional details or changes will be adjusted (i.e. no negotiations are allowed at this point – these are the final terms).

Consideration is a value exchanged for a commitment or provided in return for it. In real estate, this is usually in the form of money (cash, financed mortgage loans, etc.).

The legal capacity of both parties is more involved to discuss but means a legal adult over 18 of sound mind without undue duress or influence. Both parties must be of legal age (a minor cannot sell real estate without a legal guardian’s signature, however, in some instances, they may be able to purchase in cash if no lending is needed). The risk in dealing with a minor as a buyer is that the other party (the seller) is obligated to complete the process as any contract otherwise would proceed. Still, legally the minor could back out of the contract up until closing and make this contract voidable.

A contract signed by a person already labelled mentally insane is a void contract and not enforceable in law. However, an agreement signed by a person who is later deemed mentally incompetent could become voidable and be considered for its validity in court by the ill person if their interests are in question. Also, an exception could be regarded as a person intoxicated by alcohol or under the influence of drugs or otherwise not of sound mind.

Contracts entered under duress, or undue influence may also be voidable in court. Duress would indicate a person signed the agreement under fear of physical injury or harm to themselves or a close family or friend if cooperation was not received. Undue influence would apply if a party signed while another person took unfair advantage of them to affect the natural relationship with another party negatively.

The wronged party in the scenario (i.e. a son who disinherited land from a pair of brothers pushing a sick older sibling to sign in the hospital while the son was away). Both duress and undue influence fall under the legal capacity of parties to agree.

The lawful objective of the contract is simpler to explain. The contract has to be for a “legal purpose.” If the real estate transaction is against the law, it could not be legally protected in court.

Lastly, all real estate transactions involving buying and selling property must be in writing according to the Statute of Frauds requirement to protect against unfair and untrue testimony in court.

Binding a Party to an Offer to Purchase in Real Estate – Acceptance and Communication Requirements

A well-written contract is only a portion of what constitutes a legal offer to purchase – a request does not become an actual contract until the submission is received and accepted by the other party as is (i.e. the seller); the offer is signed by the seller and communicated back to the original party (either buyer or buyer agent) in acceptable protocols.

A counteroffer rejects an offer, creating a need for a new request to be re-initiated. Suppose a seller legally establishes a counteroffer (negotiating different terms such as sales price, earnest money deposit, or closing date). In that case, another offer could be submitted and accepted by a potential foreign buyer before the original buyer responds due to this detail. Thus, proper commencement of these steps can be critical to protecting a buyer in the offer process. Due to the number of more information in the protocol to offer and accept, another article will go into detail on “Home Offer To Purchase- Necessary Steps for Going Under Contract.”

Purchasing a home is an expensive investment. If the five essential elements of a legal contract are present – mutual assent, consideration, the legal capacity of both parties, lawful objective, and a written agreement – even a simplistic offer to purchase can be enforceable in court. A professionally licensed real estate agent should be advised to protect the interests of buyers and sellers for best results and avoid significant complications in any real estate transaction.