Purchasing Real Property with an Agent
Purchasing Real Property with an Agent
Generally when purchasing a real property, a document called the ‘offer to purchase’ is submitted to the seller/listing agent. After negotiation and terms agreed, the final offer to purchase will be executed and signed by all parties. By executing the offer to purchase, the property will be taken off the market and all ads will be set as ‘pending’ and any other potential buyers would be required to submit a back-up offer to the seller.
The next item that requires attention will be the Earnest Money and Due Diligence Monies. Both of which are incentives offered by you, the buyer, in exchange for the seller’s exclusivity to sell the property to you within the contractual time frame stated in the offer to purchase. In exchange for Earnest Money and Due Diligence Monies, you now have time and permission to perform inspections of the real property and investigate the home for defects/damages. This can be done by hired contractors such as home inspectors, termite inspectors, surveyors, etc. This should all be done during the Due Diligence period stated in the contract. You may request the seller to repair/replace items as a result of any inspections; however the seller is not obligated to do so.
Most of the time, an agreement is reached between the parties in regards to the repairs and the purchase will go forward. However, you as the buyer do have the option to terminate the contract for ANY reason within the Due Diligence period and still be entitled a refund of your Earnest Money, though Due Diligence Money are non-refundable since that is the price paid for the period of inspection time. On the other hand, both Earnest Money and Due Diligence Money will be credited to you at closing if you do decide to proceed with the purchase.
Steps to Submitting an Offer to Purchase:
- Determine a purchase price that you would pay for the property.
- How will the purchase be financed? Cash or loan? You’ll need to provide a pre-approval letter with the offer if it’ll be financed with a loan.
- Determine the Due Diligence date and Closing date.
- How much Earnest Money will you offer?
- How much Due Diligence money will you offer, if any?
- What name(s)/entity will be on the deed if and when the purchase goes through?
- Will you request for any personal property on the premises that belongs to the seller to be left behind? (Ex: Washer, dryer, refrigerator, window blinds, etc)
- Once you have determined the above, your agent will complete the standard Offer to Purchase contract, which will then be sent to you/the buyer for signatures. Afterwards, it’ll be sent to the seller/listing agent.
- Seller(s) will then accept, reject, or submit a counter offer to your agent.
- Once all negotiations are complete, and terms agreed. All parties will sign the Offer to Purchase contract.
- After the contract is signed, any deposit monies will need to be delivered to the applicable parties in accordance to the contract.
- Due Diligence period begins once the contract is signed by all parties. This date can be extended before expiration if all parties agree. If for any reason you as the buyer would like to terminate the contract and be entitled to a refund of your Earnest Money deposit, a written termination will need to be sent to the seller/listing agent on the last Due Diligence date by 4:59pm.
- A NC real estate attorney of your choice will be contacted to perform a title search of the property and represent you/the buyer during the transaction. If desired, the attorney can also help you/the buyer obtain title insurance on your behalf. The attorney will be responsible for collecting, and distributing all monies collected at closing.
- If the purchase is not terminated by the Due Diligence period, the purchase will proceed to closing. Your agent will schedule a specific time with the attorney for the closing date noted in the contract. Typically, any amounts higher than $500 needed from the buyer at closing will need to be in the form of a wire transfer from your bank. NO PERSONAL CHECKS or CASH. (Some closing attorneys will accept a certified bank check depending on the amount and bank drawn from). Per the Offer to Purchase contract, delay of closing can be delayed for up to 14 days, as long as the delaying party is diligently working to get the deal closed. If additional time is needed to close, both buyer and seller will need to amend the contract to a new closing date.