Ten tips toward a quality offer on a home

October 28, 2014

Reading that document before you sign a contract is important. If that is why they displayed it, getting educated early is good.

© 2014 Richard Montgomery1

Reader Question: While attending an open house, the agent had a contract form displayed on the kitchen counter. They explained it as “what we sign if we want to buy the house.” We thought it was high pressure or presumptive because we showed no interest in the house. We are curious to why they displayed it. Your thoughts? Sarah T.

Monty’s Answer: It is possible the agent displayed it for the reason you suspected. The agent may believe that if an open house attendee is interested in the form used to buy the home it is an indication the attendee has an interest in the home. From the response you were given, it is difficult to know, but there may be another reason.

The form is an “offer to purchase.” It is the most important document of the many forms you will be asked to sign in the process of buying a home. The agent may have provided the form to help you make a quality offer on a home. If that was their intent, it sounds like they missed an opportunity.

A good idea

For an agent to display an offer to purchase can be very telling, because that form is one to become very familiar with, before you are even close to signing one. It is a positive sign when an agent educates you. That form can be stressful and scary, or it can be exciting and satisfying. The difference is what you know about how you got to this point and making wise choices; choices based on facts and emotional restraint. Unfortunately, “Fear of loss” is one of the reasons buyers choose a home. There will be another home coming along if you are not successful on one.

Get to know it – before you need it

To become comfortable with the form before you get involved with the details of signing an offer is a good example of “what you know.” Do not wait until an agent is asking you to sign this document to read it for the first time. Ask an agent you interview to provide a copy of the “offer to purchase” form so you can prepare for the time to negotiate, then reserve a time to read it. Have a notepad to write questions down about the purpose of certain clauses or when the meaning is not clear.

Read every document in advance of signing in a real estate transaction. Technology has made it convenient to share documents electronically. While completing documents at the kitchen table or the hood of a car can be very convenient, today, there is no reason for not reading them in advance. We are all accustomed to agreeing to “terms of use” without reading them when we sign into websites, but it is much more personal and perilous when buying and selling real estate.

Communicate with email

Ask questions you have by using email. There are a number of reasons for this approach:

  1. You and the agent can dialogue when it is convenient for both of you.
  2. You gain time to consider implications in the document’s words before you sign it.
  3. Writing questions down and answering them in writing commits each party to communicate clearly.
  4. More memorable than conversation.
  5. It is easy to store the information for future reference.

There is an old far-eastern proverb that will help you apply this practice to your process, “ The strongest memory is no match for the weakest ink.”

Let us promote an understanding

Remember that your offer becomes a contract of sale when accepted as written. You do not want to leave any question unanswered unless you have protection with a well-written contingency. Understanding the language and reviewing the offer beforehand should help reduce last-minute concerns and surprises. Here are just a few of many important subjects:

  • Agency disclosure
  • The proposed price
  • Contingencies
  • What personal property or fixtures is included, or not, in the sale
  • Deadlines
  • Penalties
  • Representations of known defects
  • Can the buyer force the closing when the seller reneges? Can the seller sue for specific performance if the buyer fails to close?
  • What if there is a fire?

When you are selecting an agent to help you find your home, observe how the agent reacts to your question about providing documents in advance. If they see part of their job is to prepare you for what is to come, they may be a good choice.