Submitting an Offer To Purchase

Congratulations on making it to this part of the home purchasing process! Once you’ve found the home you want to settle down in, the next step is to make is yours.

Before you put your Offer To Purchase in writing, make sure you understand what information you should, and should not, include in the Offer. This is done with a series of steps one of which is signing the sales contract. Also, it will be important that write in the necessary contingencies to allow yourself enough room to ensure this is the correct purchase.

What is an Offer To Purchase?

The Offer To Purchase is the sales contract and it is a legally binding document.  In Middleton, we use the WB-11 Residential Offer To Purchase for residential purchases. If you are intimidated by signing one, you are perfectly right to feel so.  Nevertheless, as long as you make sure the information contained in the sales contract is in your best interest, then you have nothing to fear.

The first thing you should do is forget about the myths you’ve heard about making an Offer To Purchase on a home. Many buyers believe that once you’ve put in an Offer on a home, that they still have the liberty to shop around. While this is true in a sense, it’s in your best interest not to make any additional Offers while you still have one on the table. If both sellers accept your Offer, then you’d be obligated to buy both! An Offer To Purchase is a legally binding contract, and should the seller accept your Offer, you will be held to that Offer.

What happens after submitting an Offer?

The seller can do one of several things: 1.) They can accept the Offer, 2.) They can reject the Offer, 3.) They can draft a Counter-Offer, or 4.) They can ignore the Offer and not respond. If the seller does anything other than accept the Offer you still have the ability to continue shopping for a home (if you choose).

When you’re making an Offer To Purchase on a home there are several pieces of information that have an impact on the sale and you will need to include.

Key Elements of an Offer To Purchase

  • The selling price and method of payment. In most cases, a mortgage is the method of payment and you should detail the amount of down payment, mortgage loan amount and any other details about the loan.
  • Earnest money amount. This is the amount of money you are depositing either with the Offer To Purchase or within a certain amount of days after acceptance of the Offer. This is your “good faith” money that demonstrates to the seller that you are serious of the Offer. (This amount will apply towards the purchase price)
  • The sales contract should include the amount of time that the seller has to respond to your Offer, whether it is to accept or counter the Offer.
  • The closing date and details about when and where the closing will take place.
  • What’s included, and not included, in the sale. Don’t make the assumption that everything you see in the house will be included when you make the final purchase. If the seller is including the appliances with the house, it must be listed in the sales contract otherwise you could end up purchasing your own appliances.
  • Home Inspection. This is where you hire a Wisconsin licensed home inspector to inspect the property prior to closing. Your offer should include something to the effect of “subject to an inspection by a Wisconsin licensed home inspector of the entire premises”. The sales contract should detail not only who will pay for the inspection, but also the party responsible for any repairs or follow-up inspections as needed. Of course, if you’re purchasing a fixer-upper or foreclosure, these contingencies may vary. Consult your real estate agent.
  • Home warranty (if applicable). Be sure to include any warranties that are to be included with the home. A description of the warranty should be included in the sales contract.
  • Any other contingencies that you would like included in the Offer To Purchase. This would include any property surveys, additional inspections and/or testing, attorney approvals, well & septic testing, etc.

Keep in mind that your Offer can easily become a legally binding sales contract if it is accepted by the seller. Make sure it includes everything you would want in the home purchase, and carefully draft the contingencies to your approval.

In many cases, the seller will have the sales contract, especially if they are working with a real estate agent. You might also want to have sales contracts on hand. Please contact our office to get a sample contract at 608-395-3005 or email to ronreed@restainohomes.com

 

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