by Phil Halverson, Esq., Halverson & Associates
(Reprinted from an article published by the Bar Association)
This article discusses common legal questions that arise in the purchase and sale of real estate.
Buyers and sellers of real estate sign contracts and make important personal, financial and legal decisions. It is intended to help buyers and sellers of property make informed decisions when making or accepting offers, seeking financing or transferring title to real estate.
Real estate is probably the single largest acquisition a person will ever make. It is important to consider these obligations when deciding to purchase property.
1. How Do I Make An Offer?
The offer sets forth the conditions and price the buyer is willing to pay. It must be in writing and clearly set forth the important elements necessary to complete the sale. Some of those elements are price, financing, inspections, down payments, repairs, etc. The offer will also set the date and time by which the seller may accept the offer and the “Closing Date”. This is the day by which everything must be done to transfer ownership of the property.
2. Can A Buyer “Change His Mind” After A Contract Is Signed?
The offer sets forth terms and conditions that must be met to complete the sale. Conditions commonly found include “subject to obtaining suitable financing.” The formation of a binding contract depends upon the party’s ability to meet the stated conditions. A reasonable attempt must be made to satisfy the conditions. If the conditions cannot be met, for example, if it is not possible to secure the necessary financing or to sell an existing home, the contract will end. This is important especially where at the time of making or accepting an offer there are things that have not been finalized.
3. What Is An Acceptance?
When an offer to purchase is delivered, the seller should read it carefully and decide that all the terms and conditions are acceptable. On most standard offer to purchase forms, the acceptance is on the same form as the offer. When the offer has been signed by the buyer and accepted by the seller, a binding agreement for the purchase and sale of the property exists.
4. What If The Seller Doesn’t Like The Offer?
THE COUNTER OFFER. If a seller is unable or unwilling to accept all the terms of the offer, the seller can make a counter offer. The counter offer is usually made on a separate document. The seller’s counter offer is a new offer to sell the property on different terms. The buyer can accept those terms or make another counter offer to purchase. It is important for both the buyer and seller to realize that an offer ends when it has been rejected or a counter offer is made.
5. What If I Change My Mind?
An offer or counter offer can generally be withdrawn at any time before the other party accepts. An offer or counter offer expires when the time limit it specifies for acceptance has passed, or it has been rejected, or a counter offer is made.
Click here to see Part Two
Click here to see Part Three
Click here to see Part Four
Do you have a question?
If you have questions about any aspect of this month’s featured article, you may submit them directly to the author for consideration. Click here to submit a question about the article “Questions and Answers about Real Estate“.
Founded in 1970, Halverson Associates has been providing quality legal services with an emphasis on Civil Litigation, Business Law, Real Estate, and Personal Injury for over 30 years, and offers a free, initial phone consultation.
American Apartment Owners Association offers discounts on products and services related to your commercial housing investment including REAL ESTATE FORMS, tenant debt collection, tenant background checks, insurance and financing. Find out more at www.joinaaoa.org.
To subscribe to our blog, click here.