DURATION OF OFFER:
This section is simply telling the seller how long you are planning on making your offer good through. If you are in a competitive market, some real estate agents will try to shorten the time up and give a seller a few hours. Please note, this does not work and usually just irritates the seller and their real estate agent. Remember, the sellers’ real estate agents job is to get as many offers and highest price for the listing. By accepting the first offer within a few hours of the listing isn’t very beneficial to a seller. Of course, this can also back fire on a seller because if this is the only offer and the buyer decides to move on, then you have lost your window. The typical amount of time to make an offer good through is 24 hours.
PURCHASE AND SALE AGREEMENT
This section is for the date the parties (buyer and seller) will sign the actual Purchase and Sale Agreement. This is done once the buyer has had their home inspection and findings have been negotiated and agreed upon. This date is usually 14 days from seller accepting the offer. This date can be extended if necessary, but it must be in writing. Anytime a buyer or seller requests an extension to perform any paragraphs of the offer, IT MUST BE IN WRITING AND SIGNED BY ALL. Some real estate agents fail to obtain extensions in writing. Because everyone is so busy, they often just make a phone call to the other agent and verbally agree. Please note, this is not acceptable or enforceable so make sure it’s in writing or it didn’t happen!
This one, as the name indicates, is the date on which you will close and the property will be yours! This date is typically 45 days from the date the seller signs the offer. This is also the time where the balance of the money due (difference between mortgage amount and purchase price), along with the closing costs and pre-paids from lender are paid. These funds are typically brought to the closing in the form of a cashiers/bank check payable to yourself (the buyer). You should receive the final amount needed from the attorney a day or 2 prior to the closing. If you do not, you need to contact the lender and find out the amount needed. Your real estate agent can not do this for you. At the time of the closing, if you meet at the registry of deeds, you should get keys to your new home. But if the closing is taking place elsewhere, you may not get the keys until the Deed is recorded. Most attorneys will electronically file the documents for recording. This is important because many buyers will prematurely line up movers, cable companies, floor people, etc. for the morning of the closing and become completely derailed when they find out they don’t have the keys! You are not a legal owner until such time as the Deed is recorded. Sometimes arrangements can be made but do not count on it. Heaven forbid you start moving your stuff in or start having floor refinished to find out something occurred that prevented the deed from being recorded! So do not make plans for the same morning of your closing. Play it safe and speak with your real estate agent so that arrangements can be made in advance.
This date can also be extended if necessary, but it must be in writing. Anytime a buyer or seller requests an extension to perform any paragraphs of the offer, IT MUST BE IN WRITING AND SIGNED BY ALL.
If you remember the second paragraph of the offer, you put down the earnest money down payment (usually $500 or $1000) and then a balance when you signed the Purchase and Sale Agreement. When you write those checks, they are oftentimes written to the sellers’ real estate agent because their brokerage is acting as the escrow agent and are going to deposit the checks into non-interest bearing accounts to be accounted for at the closing. Each brokerage has an escrow policy. The most important thing to note is that just because the sellers side is holding your money, should a dispute arise between the parties and the transaction is terminated, it does not mean that they will release your money automatically to the seller. Brokerages take being an escrow agent extremely serious and will not release ANY MONEY to either party until such time as both parties sign a release that clearly indicates who the funds are paid to.
There are also instances where you will write the earnest money deposit checks to the attorney for the sellers because some brokerages do not want to, or can’t be, be escrow agents. The same principals apply but find out what that attorney’s escrow policy is and ensure that they too require a release signed by all parties prior to releasing any funds.
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