REMEMBER: An offer is NOT valid until it is in writing and is signed by the buyer. A contract is NOT binding until BOTH buyer(s) & seller(s) have signed. When you receive an offer, make sure that you understand special clauses or sale contingencies. This gives the buyer the right to walk away with their earnest money if these clauses/contingencies are not met.
Common Sale Contingencies
Inspection
Most offers will be contingent upon a home inspection. If needed, the buyer (or agent) will ask for you to make repairs and/or credit the buyer for items found in the inspection.
Financing
Also called a “mortgage contingency”, which gives the buyer time to apply for and obtain financing. Buyers also might request you to pay for their mortgage costs.
Appraisal
It is typical for lenders to want a home appraised to ensure the home is valued at a minimum, specified amount. Guidelines and regulations have significantly increased since the “2008 Crisis”.
Home Sale
The purchase of your home is contingent upon the sale of the buyer’s home, which probably won’t take long in this market (depending on their pricing).
Keys to Remember
- If you accept an offer, make sure the buyer submits earnest money to title company ASAP
- You can always make a counter offer before signing anything
- If you sign it, it then becomes a legally binding contract.. so read everything twice
- Any changes made to the contract require a written approval from all parties for the change to be valid
- You always have the right to reject any offer without further consideration