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