| An offer to purchase is a legally binding | | | | another.Closing cost clauses. You can specify |
| document, not just a casual negotiating tool. | | | | that the seller pays for the closing fee, the |
| The moment the seller of the real estate | | | | title insurance, the recording fees, and even |
| signs your offer, you are obligated to live | | | | the points on your loan. For many sellers the |
| up to its exact language. Since you can write | | | | price is the most important thing, and they |
| the offer how you want to, why not include | | | | don't care too about the details. What if |
| the clauses that smart buyers use to protect | | | | they don't want to pay the costs? You at |
| themselves? You can also use language that | | | | least gave yourself some negotiating points. |
| will save you money.The Offer To Purchase - | | | | Now get something for dropping each of the |
| Important ClausesInspection contingency | | | | costs you included. This could include a |
| clauses. You want something like this in | | | | reduced interest rate if the seller is |
| every offer to purchase: "Offer is contingent | | | | financing part of your purchase.Basic |
| upon a home inspection and buyer's approval | | | | financing contingency clause. If the loan |
| of the results; inspection to be done at | | | | doesn't come through, and you can't buy the |
| buyer's expense within ten days." You can ask | | | | home, you'll lose your deposit, unless you |
| the real estate agent for help with the | | | | have something like this in the agreement: |
| specific wording. This clause gives you the | | | | "Subject to buyer obtaining a firm commitment |
| right to have an inspection done. If anything | | | | for suitable financing within ten days." |
| negative is found, you could refuse to | | | | Actually, the language should usually specify |
| "approve" of the results, and so get your | | | | what "suitable" means in terms of interest |
| deposit back. Alternately, you could | | | | rate and such.Spousal approval clause. This |
| renegotiate a lower price.Earnest money | | | | clause can be as simple as "Subject to a walk |
| clause. Real estate agents will tell you that | | | | through inspection and approval of home by |
| a certain amount is necessary for a deposit, | | | | buyer's wife (or husband or partner - state |
| but the decision is yours. A small earnest | | | | their name) within two days." If your wife |
| money deposit may be taken seriously, if you | | | | says no to the deal within two days, you can |
| include a clause like this: "$100 earnest | | | | back out and get your deposit back. For the |
| money deposit, to be increased to $2,000 upon | | | | seller to agree to this one you need to keep |
| acceptance of this offer." Or you can have it | | | | the time frame as short as you can.Some of |
| increased "when all contingencies are met." | | | | the above clauses are normal and acceptable |
| The reason? Suppose there's an argument about | | | | to all, while others are likely to annoy the |
| you backing out because the inspector found | | | | real estate agent. That's okay. The seller |
| foundation damage. You won't have your money | | | | has the right to say no to your offer in any |
| tied up while this is being resolved.Right to | | | | case, and you have the right to use these |
| assign clause. This one is primarily for | | | | clauses to protect yourself in your offer to |
| investors. Suppose your partner isn't there | | | | purchase.Copyright Steve Gillman. Visit his |
| to sign the offer, or you want to "flip" the | | | | website for: |
| deal to another investor, or you may need to | | | | |
| involve a partner for purposes of funding the | | | | 1. A photo of a beautiful house he and his |
| deal. You need a clause in the offer to | | | | wife bought for $17,500. |
| purchase that covers this. Including the | | | | |
| words "and/or assigns" after your name on the | | | | 2. A free book on how to save thousands |
| offer is usually sufficient, but ask the real | | | | buying your next home. |
| estate agent what the local custom or | | | | |
| language is. This allows you to add another | | | | 3. A free real estate investing course. |
| buyer or assign the whole contract to | | | | |