You placed your home on the market and a potential buyer has given you an offer, or in some cases you have received multiple offers on your home. Once that happens, will you know which one is actually the best offer? Many people are under the assumption that the highest price is the best offer, but that may not always be the case. The answer to the question, “Should I accept or should I reject?” can be found in the sales contract, which contains all the particulars regarding the sale of your home.
Let’s begin with the contingencies; a contingency is a provision that must be met in order for the property to close. A home inspection contingency gives the buyer the right to have the property inspected. They may also be able to renegotiate the contract with you or demand repairs be made. The appraisal contingency usually applies if a lender is involved. This allows the lender to complete a property appraisal and determine if the value is satisfactory. Along with this, there would also be a mortgage contingency. Simply put, this states that if the buyer is unable to be approved for the mortgage, they are released free and clear from the contract. Lastly, there is the title contingency, which ensures the buyer is given “Clean Title.” This also ensures the buyer becomes the rightful owner of the property and releases them of ownership claims from previous owners of the property along with any fraudulent or forged signatures.
Once you have reviewed the contingencies, take a peek at how much earnest money the buyer is willing to put up. This is a lump sum the buyer is willing to deliver once the contract is signed and will go toward their down payment. If there is an issue later on and the buyer walks away, the seller could potentially make a case to keep the earnest money.
Next, have you looked at the closing date? And have you made plans yet regarding where you’ll be moving and when? A buyer may want to take ownership quickly if this is a cash transaction but it could be slower if a lender is involved. Typically, a transaction involving a lender could take 30 to 45 days from beginning to end.
Real estate sales contract become legally binding once they are signed by both the buyers and the sellers. Be sure prior to signing that there is an attorney review period which allows both parties to have the contract reviewed and also cancelled by their respective attorneys within a pre-determined period, usually 5 to 10 business days. Along with that, be sure to have the contract properly explained by your Realtor prior to signing.