The actual format of purchase contracts varies by area. However, most contain the basic elements of an offer, such as purchase price, contingencies, inclusions and dates.
Typically, your agent will receive the offer from the buyer's agent and deliver it to you, either in person or electronically. Some of the important characteristics of the offer that your agent will discuss with you are:
- Purchase price - The offered price should be based on the fair market value as demonstrated by comparable property sales in your area over the past six months.
- Deposits - The deposit reflects good faith on behalf of the buyer and may consist of a single deposit presented with the offer or may provide for a second deposit after inspections are completed or at some later date--all negotiable prior to both parties signing the agreement. Deposits go into an escrow account, to be applied to the ultimate purchase at the time of closing.
- Mortgage contingency - Ideally, a mortgage pre-approval will accompany the offer, providing evidence of the buyer's financial ability to purchase. The terms of the mortgage contingency, such as interest rate and points should be realistic based on current lending conditions.
- Inspection contingencies - Offers to purchase are customarily contingent on a home inspection, including the structural and mechanical components of the property. It is preferable for these to be completed as soon after the contract is signed/executed as possible in most cases. This allows time to negotiate and and come to agreement on terms for requested repairs/remedies and to complete everything prior to closing.
- Inclusions - Personal property items to convey with the property, such as appliances, light fixtures, window treatments, outdoor hot tubs, etc., should be clearly defined in the contract. Likewise, if there is a special light fixture or other "attached" fixture that you wish to take with you, buyers may expect a reasonable replacement or credit, again to be clearly outlined in the contract.
It is important to note that once you've completed negotiations, reached agreement and signed the contract, you have not actually "sold" your home. Until all of the various contingencies are met, the contract remains "conditional".