Making an Offer

There are many items to consider when making an offer, aside from the obvious, which is the purchase price.  Make sure you consider your personal budget before arriving at the offered price.  There are always additional expenses when you move into a home such as utility deposits, moving expenses and minor changes to make the house work for you (new cabinets, minor repairs or a new picture for the living room).  These items all add up in the end to expenses that may not have been considered.  After you make your down payment, earnest money payment and closing costs, calculate a reserve so you do not spend all your money on the house.  Your lender will give you a Good Faith Estimate when you apply for your loan so you will know the exact amount to expect in closing costs and down payment.  This will help with the budgeting process.  Another option available is asking the seller to contribute to closing costs.  Depending on the loan and down payment, a seller contribution could help you purchase a home that may have been a bit out of reach financially.  Traditional sellers concessions can be between 3% - 6% of the purchase price of the home, but check with your lender on the parameters based on the loan for which you are approved.  This concession is negotiated during the offer process and not mandatory or required. 

Other elements included in an offer to purchase are closing date and time, inspection dates, personal property included in sale, Title Company, and inspection details.  All of these items are negotiable and have to be agreed upon by the buyer and seller. If one party does not agree with any of the terms, they will either submit a counter offer or reject the offer entirely.  The counter offer will only change the terms of the contract not agreed upon while the rest of the terms remain in place.  The counter offer process can go back and forth as many times as necessary until all the details are satisfactory to both parties.  Once the contract is agreed upon, any additional addendums submitted during the contract period do not negate the contract, if not accepted.  For example, after inspections, the buyer would like the seller to make repairs and the request is submitted in writing.  If the seller says no, the contract to purchase is not cancelled and the buyer has the right to re-negotiate or cancel the contract.  Once an offer is accepted by both parties, it can only be cancelled by agreement of both parties.

A contract for the sale of real property must be in writing to be enforceable in an Oregon court.  A VERBAL OFFER OR ACCEPTANCE SHOULD NOT BE MADE OR RELIED UPON.  Contracts for the sale of property are often called “earnest money” or “sale” agreements. They are legally binding contracts.  Buyers and 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.  Both buyers and sellers should carefully review these provisions.  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.   BUYERS AND SELLERS ARE RESPONSIBLE FOR SELECTING THE TERMS AND CONDITIONS OF THEIR AGREEMENT.  REAL ESTATE LICENSEES CAN GIVE BUYERS IMPORTANT MARKETING, BUSINESS AND NEGOTIATING ADVICE AND INFORMATION AND CAN ASSIST IN PREPARATION OF THE SALE AGREEMENT, BUT 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 (greater Oregon).

Some Content taken from the Oregon Property Buyers Advisory http://www.oregonrealtors.org/About_OAR/buyadv.html#Financing