Congratulations! You have found your dream home, and now you need to write a successful offer to make it your own!
A purchase offer typically includes standard terms that spell out the “who, what, when, how, and where” of the purchase. This means that the date of the offer, the legal description of the property, the complete names of buyers and sellers (or parties to the contract), the purchase price, and finally, a closing date.
Your contract will also typically include a provision for an earnest money deposit (aka a promise to pay) that is held in trust by an escrow company during the contract period. This earnest money may be applied toward your purchase price at closing, or could potentially be forfeited to the seller if you do not fulfill your contract obligations.
In addition, your offer should spell out which items are either included in the purchase (like appliances, for example) or excluded (like personal property such as a swing set or portable shed).
Commonly Used Addendums
What other terms or addendums to the contract could you include with your offer?
If you are using a lender for financing, then you would most likely make your offer “subject to” a condition that you be able to obtain financing within a certain time period. That financing may also be “subject to” an appraisal by the lender.
If you want to have the home inspected before you agree to purchase it, those terms would be included on an inspection addendum. This means that the purchase is “subject to” an inspection during a specified time period where the buyer conducts an inspection and then agrees to move forward with the purchase (or not).
If the home is on septic system or a well, you may ask the seller to provide proof of good working condition or comply with any county requirements, which vary depending on the county that the home is located in. Your offer could include time periods for you to review the HOA or the neighborhood, or perhaps review a recent survey, a special assessment, a road improvement, or suitability for your intended use. Further, you may want additional time during a neighborhood review period to search information on crime or sex offenders in the area. The list is limitless depending on your criteria and needs.
Lastly, your offer should include a provision for the seller to provide a warranty deed or marketable title (with insurance or a guarantee to you) that the title to the property is free from any encumbrances such as liens, property taxes, claims, etc. at closing. Once these terms are agreed upon, you have a binding contract and can proceed toward fulfillment of the terms of the contract and closing of your new home!