Submitting an Offer

The Contract of Sale otherwise known as the Purchase and Sale Agreement is a legal document which binds the buyer to a set purchase price and binds the seller to convey the title. The contract also serves as the initial directions to the escrow company to begin processing the transaction. When your agent prepares your Purchase and Sale Agreement, make sure you are perfectly clear about the following details:

Contingencies
Also make sure you know what your contingencies are. The normal contingencies are that the buyer must obtain financing and the home must pass a home inspection. Sometimes the buyer must sell another home. So that is a contingency that can be added. Contingencies can destroy a deal, so it is important to know if there are any contingencies and what they are.

Who pays costs?
Sellers customarily pay for the real estate commission, one-half of the escrow fees and their portion of the past year's taxes and assessments. Buyers customarily pay for one half of the escrow fees and their loan fees. Sellers and buyers share some of the expenses of buying and selling, such as title expenses. This needs to be negotiated during the purchase offer time.

As noted in the negotiation section, there are concerns beyond purchase price. One of these is called seller concessions. Concessions are monies that the seller can pay without lowering the price of the property. These can include closing costs and in some instances the lender may allow some assistance with the down payment.

What is the actual closing date?
The closing date is the date in which the net proceeds are available to the seller and the title has been recorded. It is set in the original purchase agreement by agreement between the buyer and seller. It is always nice to set a closing date that leaves you enough time to prepare to move in, and which doesn't cost you unnecessary money. The date of closing can affect your closing costs (make sure to ask your lender for a good faith estimate).

What is the date of occupancy?
Many times the seller will request to remain in the property after closing, in part to assure that closing actually occurs without the seller having moved from the property. If that is the case, the seller actually becomes the tenant of the buyer after closing, so proper written documentation is needed regarding the seller's occupancy.