"If we were to make an offer......"
.....and so began this morning's question from a buyer. He asked 4 different questions, one of which is "how binding is the offer?"
Although I give a sample purchase contract to buyers at our first meeting, and talk about how offers are structured, it's often not until they are actually contemplating making an offer that they are ready to absorb the information. I want my clients to think, to ask questions, to fully understand the process.
My answer to "how binding is the offer?" varies from case to case, but includes this explanation:
- I structure a contingency period into the offer, typically 10-17 days.
- We make the offer contingent upon loan approval (which includes an appraisal contingency), and property condition approval.
- If appropriate, we also have a contingency for approval of Homeowners Association documents, title conditions, or anything else that needs further investigation. Sometimes the purchase might be made contingent upon the sale of your current property.
- If your offer is accepted by the seller, you'd have the contingency period (perhaps 10-17 days) to gather whatever information you need to decide if you can move forward with the purchase
- If obstacles arise during your investigation, you have 3 choices: 1) accept them; 2) ask me to try to renegotiate the contract; 3) decide this isn't the right property and cancel the contract
- If you choose not to remove your contingencies and cancel the contract, your deposit would be refunded, and you're free to continue your search.