Accepting an Offer

Real Estate Sale Form (Sale Agreement)

A contract for the sale of real property must be in writing to be enforceable in Oregon. A VERBAL OFFER OR ACCEPTANCE SHOULD NOT BE MADE OR RELIED UPON. Contracts for the sale of property are often called “earnest money agreements” or “sale agreements.” They are legally binding contracts. Sellers should seek competent legal advice before signing any contract they do not fully understand.

Sale agreements usually include provisions concerning who will hold the earnest money and under what conditions it may be refunded to the buyer or forfeited to the seller. Sellers should carefully review these provisions in any proposed transaction. The amount of earnest money pledged and the conditions under which it may be refunded or forfeited are important matters that should be carefully negotiated between the buyer and the seller.

Most sale agreements are written using a standard form. In Oregon, most licensees use a form developed specifically for Oregon real property transactions. Many of these forms contain dispute resolution provisions that require mediation or arbitration of disputes. Arbitration and mediation clauses can affect legal rights, including the right to a judicial determination of a claim and the right to appeal.

Sellers are responsible for selecting the terms and conditions of their agreement. Real estate licensees can give sellers important marketing, business and negotiating advice. Real estate licensees can assist in preparation of the sale documents only pursuant to the client’s instructions. Real estate licensees are not attorneys and are prohibited by law from giving legal advice. To obtain a referral for a real estate attorney, visit the Oregon State Bar at http://www.osbar.org/public/legalhelp.html or contact them by phone at 800-452-7636.

Seller’s Expenses

Selling real property involves a certain amount of expense. The seller’s exact costs and expenses depend on the property being sold and the terms of the transaction. Sellers should anticipate these expenses and plan for them at the time they list property for sale. Although accounting, financial consulting and tax advice are beyond the scope of a real estate licensee’s expertise, the seller’s real estate agent can help the seller estimate some of the costs and expenses that will be associated with the sale.

Seller costs and expenses include everything from moving expenses to the mortgage pay-off. Certain transaction costs, called “closing costs,” are typically paid by the seller. These include title insurance, escrow fees, legal fees, recording fees and the like. Most real estate contracts have provisions for seller-paid repairs that are identified during the buyer’s inspection of the property. Depending on the market and other factors, the seller may agree to pay some of the buyer’s closing costs. Such payments from seller to buyer are called “seller concessions.” Typically, at the time of closing, the seller will pay any sales commissions agreed to in the listing agreement.

The sale of real property can generate tax liability at the local, state and federal levels. Although unusual in Oregon, some local jurisdictions may charge a transfer tax when real property is sold; sellers should check with their agent or their local government tax office. Tax liability issues are beyond the expertise of a real estate licensee. Information on federal taxes can be found at: http://www.irs.gov/publications/p523/index.html. General information about Oregon personal income taxes can be found at: https://secure.dor.state.or.us/piti/index.cfm

Income from conveyance of real property located in Oregon by non-residents is subject to income tax withholding at the time of sale. Certain “authorized agents” (typically escrow companies) must withhold the tax and remit it to the Oregon Department of Revenue. There are a number of exceptions to the withholding requirement. Some exceptions require the seller to sign an exempt status statement under penalty of perjury. Others require the advice of a tax professional, review of Oregon statutes and the Internal Revenue Code. Such review and advice is beyond the expertise of an Oregon real estate licensee. Complete information about Oregon’s tax withholding law and copies of required forms can be found at: http://www.oregon.gov/DOR/PERTAX/docs/101-183.pdf.

Content taken from the Oregon Property Sellers Advisory at http://www.oregonrealtors.org/.docs/pg/10713#topic8.

Negotiations/Counter Offers

When offers are presented, your broker will advise and help you obtain the best possible terms and price. Understanding the various contract forms and the many contractual issues is the key to negotiating the best terms to meet your goals. All terms are negotiable including the price, financing and closing costs, inspections & repairs, closing & moving dates…the list depends on the transaction and type of property being purchased.