A Typical Offer Includes:

• The offer addressed specifically to the sellers, by name
• The offer is dated
• An actual offer to purchase the property as offered by the seller's broker
• The payment structure, which could include the Earnest money, down payment, etc. You should be specific about how much you are offering, for what purpose and when in the settlement process.
• A qualifying statement to specify whether the payments will be made in cash, cashier's or certified check.
• An expiration date for the offer, this tells the seller when he or she has to either accept or decline your offer, or make a counter offer.
• A list of contingencies that may nullify the contract.
• The final item: A target date for closing

TERMS TO KNOW

Asking price

The price at which the owner wishes to sell a property.

Binder

A preliminary agreement, secured by a cash deposit, under which a buyer offers to purchase real estate. See earnest money deposit.

Comparables

A common-use term meaning "comparable properties". Comparables are properties similar to property under consideration; they have reasonably the same size, location, and amenities and have recently been sold. Comparables help the appraiser determine the approximate fair market value of the subject property.

Contingency

A condition that must be met before a contract is legally binding. For example, home purchasers often include a contingency that specifies that the contract is not binding until the purchaser obtains a satisfactory home inspection report from a qualified home inspector.

Counter-offer

A rejection of the original offer by proposing a new offer, thereby terminating the original offer.

Deposit

A sum of money or other valuable consideration given to bind the sale of real estate, or to ensure payment or an advance of funds in the processing of a loan. See earnest money deposit.

Down payment

Money paid to make up the difference between the purchase price and the mortgage amount.

Earnest money deposit

A deposit made by the potential home buyer at the time of an offer. See binder, deposit.

Offer

An intentional proposal or promise made by one party to act or perform provided the other party acts or performs in the manner requested.

POP QUIZ

1. The actual price versus the sales price is an average of ___ percent lower than the list price.
   1. 2%
   2. 4%
   3. 6%
   4. 8%
2. The typical down payment or amount of earnest money is:
   1. 2-4% of price
   2. 5-10% of price
   3. 15% of price
   4. $1,000
3. The typical contract is __ times as long as the offer to purchase:
   1. 2 times
   2. 3 times
   3. 4 times
   4. 10 times

The Buddy System and The Contract...

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