Offer To Purchase Real Estate
Offer to Purchase Real Estate
To: ____________, ______________, _____________, ________________
_________________, referred to herein as BUYER, offers to purchase the following described real estate from ____________, referred to herein as SELLER, upon the terms and conditions stated herein.This offer shall expire unless accepted by 5:00 p.m. on ____ ________. SELLER shall signify acceptance by executing the attached form of acceptance.
The gross purchase price shall be $ ________ (___________ &___/100 dollars). The legal description of the property is:
_________________________________________________________________To be paid upon the following terms:
$ _____(______________ &___/100 Dollars), to be paid at closing.
The buyer shall assume and agree to pay the following existing mortgages upon the property. The unpaid principal balance of these mortgages shall be a credit towards the purchase price:
_____________________________________________________________At least 5 business days before closing, SELLER shall provide to BUYER estoppel letters providing the balance, assumability and current good standing of the above stated mortgage(s).
The BUYER shall execute a new purchase money mortgage to SELLER, in the principal amount of $________, (___________________ &___/100 dollars) payable as follows:
Interest at the rate of: __ percent Payment schedule: _______Said mortgage shall have the following priority:
_____________________________________________________________This offer is conditioned upon BUYER obtaining loan approval at least __ days prior to closing of this transaction, of a mortgage loan as follows:
Principal amount: $______ (____________________ &___/100 Dollars)
Loan term: ____________
Maximum interest rate as APR under regulation Z: ____ percent
Maximum points to be paid by BUYER: ____
Maximum application fee: $____BUYER shall make a mortgage loan application within 3 working days of the acceptance of this offer, and should the BUYER’s loan application be denied, the BUYER shall have the option, within 2 business days to rescind this transaction. If BUYER elects to rescind the transaction, BUYER shall receive any deposits made from SELLER.
The closing will be held within ____ days of the acceptance of this offer to the SELLER, but in no event in less than 20 days from the notice. The SELLER shall convey to the owner by warranty deed the property herein, and the title thereto shall be merchantable. Within 30 days of acceptance, the SELLER shall provide a binder for title insurance in the principal amount of the purchase price. The title shall be free and clear of any encumbrances other than those, if any, to be assumed by the BUYER at closing. Should any defects be in the title, the SELLER shall have 60 days to clear the same. If the SELLER is unable to do so, BUYER shall have the option of closing or rescinding this contract. Should BUYER rescind the contract, then the SELLER shall refund as liquidated damages, and not a penalty, the funds paid for the option to BUYER.
The BUYER may at its expense obtain a current survey of the property. Should the survey indicate encroachments, then the SELLER shall remedy the same within 60 days. Should SELLER fail to clear such encroachments, then the BUYER shall have the option of closing or rescinding this contract. Should BUYER rescind the contract, then the SELLER shall refund as liquidated damages, and not a penalty, the funds paid for the option to BUYER.
The SELLER shall maintain the property and all improvements in the same condition as that which exists on the date of acceptance of this agreement, and shall deliver the same to the BUYER in the same condition, ordinary wear and tear excepted.
At closing, SELLER shall provide a report from a licensed entomologist certifying the absence of termites and other wood destroying organisms. Should the report show the active presence of any wood destroying organisms, and the BUYER shall have the following options:
a) if the damage and cost of treatment is less than 10% of the purchase price, the BUYER may withhold this sum and close, and the same shall be a credit on the sums due at closing;
b) if the damage exceeds 10% the BUYER may agree to an extension of closing for 90 days to allow SELLER to repair the same at its expense, or, the BUYER may refuse to close, and shall have the sums paid for the option fully refunded by SELLER.During the period between exercise of the option by the buyer and the closing the premises shall be adequately insured for fire and other perils.
The following closing costs will be paid by SELLER:
________________________________________________________________The following closing costs will be paid by BUYER:
________________________________________________________________The parties hereto acknowledge that ___________, a licensed real estate broker/salesman was the procuring broker herein.
Should the premises or any portion thereof be leased, SELLER shall provide to the BUYER either a copy of and any all leases in effect, or, should there be any tenants in possession without current written leases, the SELLER shall provide estoppel letters at least 5 days prior to closing stating that there is no lease and the duration of any verbal lease, and the terms of the verbal lease.
All taxes for the current year, escrows on mortgages assumed by the BUYER, prepaid insurance on policies assumed by BUYER, homeowners association dues, shall be prorated between the parties as of the date of closing.
At the time of closing SELLER shall provide an affidavit to
BUYER that either:
a) there have been no improvements made which would subject the property to the filing of mechanic’s, materialman, labor or other such liens; or
b) that there were improvements made to the subject property and all persons having the right under law to lien the property were paid or lien waivers obtained.The SELLER represents to the BUYER that the present use of the property is lawful and complies with all zoning, governmental regulations and restrictive covenants and other similar contracts in effect.
Dated: _____________________
___________________________________________
_______________, BUYER/OFFEROR
ACCEPTANCE OF OFFER
I hereby accept the offer set forth above.
Dated: ____________________________
________________________________________
____________, SELLER/OFFEREEWitnesses as to Seller’s acceptance:
________________________________________
________________________________________
Offer to Purchase Real Estate
Review ListThis review list is provided to inform you about this document in question and assist you in its preparation. This is a standard offer to purchase real estate. Be sure to modify the terms to satisfy your interests.
1. Make multiple copies. Give one to each signatory. Keep one with the transaction file.
2. This is sufficient to close the transaction. There is no need, unless you choose, to formalize this into a purchase and sale agreement. In fact, avoiding another “go round” can prevent the other side from another bite at the apple, so to speak.
3.
Frequently Asked Questions
What is an offer to purchase real estate?
An offer to purchase real estate is a written proposal from a buyer to a seller to buy a property on specified terms and conditions. It includes details such as the purchase price, payment terms, and legal description of the property. The offer expires if not accepted by a stated deadline, and the seller signifies acceptance by executing an attached form of acceptance.
What happens if the seller does not accept the offer by the expiration time?
The offer states that it shall expire unless accepted by a specific time and date, such as 5:00 p.m. on a given day. If the seller does not accept by that deadline, the offer is no longer valid. The seller must signify acceptance by executing the attached form of acceptance before the expiration.
How is the purchase price paid in an offer to purchase real estate?
The gross purchase price is stated in the offer, and the terms specify that a certain amount is to be paid at closing. The buyer may also assume existing mortgages, with the unpaid principal balance credited toward the purchase price. The exact payment amounts are filled in on the offer form.
What are estoppel letters in a real estate purchase?
Estoppel letters are documents that the seller must provide to the buyer at least 5 business days before closing. They confirm the balance, assumability, and current good standing of any existing mortgages on the property. These letters help ensure the buyer has accurate information about the mortgages being assumed.
Can a buyer assume existing mortgages when purchasing real estate?
Yes, the offer to purchase allows the buyer to assume and agree to pay existing mortgages on the property. The unpaid principal balance of these mortgages serves as a credit toward the purchase price. The seller must provide estoppel letters confirming the mortgage details before closing.
What is the legal description of the property in a real estate offer?
The legal description is a formal description of the property being purchased, included in the offer to purchase. It is typically a written description that identifies the property's boundaries and location. This description is essential for legally identifying the real estate in the contract.
Who is referred to as the buyer and seller in an offer to purchase?
In the offer, the buyer is the party making the offer to purchase, and the seller is the party who owns the property and is being offered the purchase. The buyer's name is filled in at the beginning, and the seller's name is also specified. These terms are used throughout the document to refer to each party.
What does it mean to execute a new purchase money mortgage?
The offer mentions that the buyer shall execute a new purchase money mortgage, which is a mortgage taken out to finance the purchase of the property. This type of mortgage is typically used when the buyer is borrowing funds to pay for the property. The specific terms of this new mortgage would be detailed in the offer or related documents.
How does the buyer signify acceptance of the offer?
The seller, not the buyer, signifies acceptance of the offer by executing the attached form of acceptance. The offer is made by the buyer and remains open for acceptance until the expiration time. Once the seller accepts, the offer becomes a binding contract, subject to its terms.
What are the payment terms in a real estate offer to purchase?
The payment terms specify the gross purchase price and how it will be paid, including any amount to be paid at closing. The buyer may assume existing mortgages, with the unpaid principal balance credited toward the purchase price. The exact amounts are filled in on the offer form.
