Ideas By Sky

In order to understand how the offers are made we must understand first what it means exactly.

An offer is a promise (this usually is something financial/monetary) made by the buyer, requesting something in exchange (this is usually the property/estate) for that promise. The offer is made with the purpose that the seller will be conjugated to the terms if the offer is accepted. The terms of the purchase offer must be definite and specific, and the offer must be communicated clearly to the seller.

An acceptance is the promise made by the seller showing agreement to the exact terms proposed by the buyer. The acceptance must be communicated clearly and timely to the buyer. Proposing any variation from the terms of represents a rejection of the original offer and thus creates a new offer. This is known as a counteroffer which we will go in depth in a later post.

Besides being terminated by a counteroffer, an offer may be terminated by the seller’s outright rejection of it. Alternatively, a seller may fail to accept the offer before it expires. You will see delivery timing is always important. The buyer may revoke the offer at any time before acceptance. This revocation must be communicated to the seller by the buyer, either directly or through the parties’ agents. The offer is also revoked if the seller learns of the revocation and observes that the buyer is impermanent indicates that the offer exists no more.

Here are the two disclosure requirements you need to know if you are selling a property in Pennsylvania:

1. Federal Disclosure of Information on Lead-Based Paint and/or Lead-Based Paint Hazards
2.  Lead was used as a pigment and drying agent in alkyd oil-based paint. Although lead-based paint may be found on any interior or exterior surface, it is particularly common on doors, window frames, and other woodwork. The federal government estimates that lead is present in about 75% of all the private housing built before 1978 or in as many as 57 million homes, ranging from low-income apartments to million-dollar mansions. Check this post to learn more about this hazard.
3. Seller’s Property Disclosure Statement

Most states, including Pennsylvania, require that sellers of one- to four-family residential properties make certain disclosures about the condition of the property. The seller has a duty to disclose any known defects (both material and latent) that threaten structural soundness or personal safety. Buyers have the responsibility to discover any problems or issues that are important to them. Please note that as a potential buyer, you will use this information when you develop your offer.

Real estate agents are obligated to disclose known costs associated with selling or buying the property before their clients enter into an agreement of sale. There should be no surprises.

A material fact is information that is important to a buyer’s ability to make an informed decision. Although the required seller’s disclosure statement addresses certain property conditions, a variety of other information may be material to individual buyers, therefore, must be unveiled. For example, a buyer may have a special health concern , a specific use such as allergies, for a property, or other demands that make certain facts material to a decision.

A latent defect is a hidden structural defect that would not be discovered by ordinary inspection. Buyers may cancel the sales contract or receive damages when a seller knows and fails to reveal known latent defects. For example, sellers agent was aware that the basement would flood every spring. When potential buyers were interested in purchasing the property it was summer thus there were no indication of flood and the seller covered all the material defects upon putting property on market. The courts also have decided in favor of the buyer when the seller neglected to reveal violations of zoning or building codes.

So you know what to offer but not sure where to start?

It is customary, although not essential, for a purchaser to provide a deposit when making an offer to purchase real estate. This deposit, usually in the form of a check, is referred to as earnest money or hand money. The earnest money deposit is evidence of the buyer’s intention to carry out the terms of the contract in good faith. The check is given to the broker, who holds it for the parties in a special account.

The amount of the deposit is a matter to be agreed on by the parties. Under the terms of most listing agreements, a real estate broker is required to accept a reasonable amount as earnest money. As a rule, the deposit should be an amount sufficient to

• discourage the buyer from defaulting,
• compensate the seller for taking the property off the market, and
• cover any expenses the seller might incur if the buyer defaults.

This money cannot be mixed with a broker’s personal funds. Brokers may not use earnest money funds for their personal use. A separate escrow account does not have to be opened for each earnest money deposit received; all deposits may be kept in one account. A broker must maintain full, complete, and accurate records of all earnest money deposits.

The special account may or may not pay interest, depending on state law. If the account bears interest, there must be some provision in the contract for how the interest earned will be distributed. The broker must provide both the buyer and the seller with an accounting of the amount and dates of interest payments. Often, a check for the interest amount is given to the buyer at closing. On the other hand, the contract may provide for the interest to be paid to the seller as part of the purchase price.

 If you hand your deposit or any escrow deposit to your agent, she must immediately turn the funds over to her broker. The broker must deposit these funds by the end of the business day following their receipt by the broker. If the funds are in the form of a check in connection with an offer to buy or lease real estate, then the broker may hold the check until the offer is accepted. If the offer is not accepted, the check is returned to the would-be buyer. If the offer is accepted, the check must be deposited into the trust account by the end of the next banking day.

Once the seller accepts the offer, however, the buyer may not secure the return of the money, even though the seller is not entitled to it until the transaction has been completed. Under no circumstances does the money belong to the broker. It is absolutely essential that these funds be properly protected pending a final decision on their disbursement.