It should also contain the legal description for the property in question. This can be found in local property records and usually includes your lot or parcel number.
Submitting an offer to purchase
You'll submit an offer to purchase when you're ready to buy a particular property. If you're using a real estate agent, they should be able to put the document together on your behalf, and they'll submit it to the seller or their listing agent, too.
Once the offer has been submitted, the seller can review it and either accept or reject it. They might also submit a counteroffer -- which is essentially just a new offer to purchase with slightly different terms and conditions. You can choose to accept this or make a counteroffer yourself.
Only after both parties have agreed to the terms -- and signed the document -- does the purchase offer become an actual contract.
It's not over yet
Just because an offer to purchase has been signed doesn't mean its terms are set in stone. If contingencies are included in the contract, there are still ways the deal can change or even fall through.
Both the buyer and seller can include contingencies in the agreement. Some common contingencies include:
- The financing contingency: This allows the buyer to pull out of the transaction if their loan falls through or they're unable to secure another type of financing for the property.
- The sale contingency: This one is for buyers who need to sell their current home before they can purchase a new one. If this contingency is in place, there is usually a set timeline for the buyer's home sale. If they're unable to sell the property in that timeframe, they can back out of the deal.
- The inspection contingency: With an inspection contingency, buyers are allowed a certain period in which they can have the home professionally inspected. If the inspection reveals issues with the home, they can ask the seller to make repairs or provide repair credits, or they can cancel the deal entirely.
- The appraisal contingency: Mortgage lenders won't loan you more money than a home is worth. With the appraisal contingency in place, buyers can back out of a transaction if the home fails to appraise for the full value of their offer.
- The title contingency: This contingency concerns the actual title to the home. If the title company finds any liens or legal judgments against the property, the buyer can back out of the sale.
As a buyer, including contingencies can help protect you -- and your investment dollars -- big time. But they also might make it hard to strike a deal -- especially in hotter real estate markets where competition is stiff. If you're not sure whether a contingency is right in your specific case, consider talking to a real estate agent about local market conditions. They should be able to point you in the right direction.