Do not rely on the someones word when making deals. Verbal contracts are not enforceable in real estate. You should enter into a written agreement, which is an oral or written agreement to do or not to do a certain thing, which starts with your written proposal. This proposal not only specifies price, but all the terms and conditions of the purchase. For example, if the sellers said they'd help with $2,000 toward your closing which is this has different meanings in different states, in some states a real estate transaction is not consider closed until the documents record at the local recorder, that is, the public official who keeps records of transactions that affect real property in the area, sometimes known as a registrar of deeds or county clerk, s office, in others, the closing is a meeting where all of the documents are signed and money changes hands, costs, be sure that's included in your written offer and in the final completed contract, or you won't have grounds for collecting it later.

Any real estate agent will always have a variety of standard forms, including the all important Residential Purchase Agreement, that are kept up to date with the changing laws. When you use an agent, these forms will be available to you. In addition, agents can cover the questions that need to be answered during the process. In many states certain disclosure laws must be complied with by the seller, and the real estate agent will ensure that this takes place.

If you are not working with an agent, keep in mind that you must draw up a purchase offer or contract that conforms to state and local laws and that incorporates all of the key items. State laws vary, and certain provisions may be required in your area. After the offer is drawn up and signed, it will usually be presented to the seller by your realtor, by the seller's realtor if that's a different agent, or often by the two together. In a few areas, sales contracts are typically drawn up by the parties' lawyers.

The purchase offer you submit, if accepted as it stands, will become a binding sales contract (known in some areas as a purchase agreement, earnest money agreement or deposit, that is, a sum of money given in advance of a larger amount being expected in the future, often called in real estate as an earnest money deposit, receipt). It's important, therefore, that it contains all the items that will serve as a blueprint for the final sale. These purchase offer items include such things asAddress and sometimes a legal description of the property Sale price Terms -- for example, all cash or subject to your obtaining a mortgage, that is, a legal document that pledges a property to the lender as security, that is, the property that will be pledged as collateral for a loan, for payment of a debt, instead of mortgages, some states use first trust deeds, for a given amount Seller's promise to provide clear title (ownership) Target date for closing (the actual sale) Amount of earnest money deposit accompanying the offer, and whether it's a check, cash or promissory note, that is, a written promise to repay a specified amount over a specified period of time, which is a legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time, and how it's to be returned to you if the offer is rejected -- or kept as damages if you later back out for no good reason Method by which real estate taxes, rents, fuel, water bills and utilities are to be adjusted (prorated) between buyer and seller Provisions about who will pay for title insurance, survey, termite inspections and the like Type of deed to be given Other requirements specific to your state, which might include a chance for attorney review of the contract, disclosure of specific environmental hazards or other state-specific clauses A provision that the buyer may make a last-minute walk-through inspection of the property just before the closing A time limit (preferably short) after which the offer will expire Contingencies, which are an extremely important matter and discussed in detail below

If your offer says this offer is contingent upon (or subject to) a certain event, you're saying that you will only go through with the purchase if that event occurs. The following are two common contingencies contained in a purchase order The buyer obtaining specific financing from a lending institution. If the loan can't be found, the buyer won't be bound by the contract. A satisfactory report by a home inspector within 10 days (for example) after acceptance of the offer. The seller must wait 10 days to see if the inspector submits a report that satisfies you. If not, the contract would become void. Again, make sure that all the details are nailed down in the written contract.

You're in a strong bargaining position -- meaning, you look particularly welcome to a seller -- if You're an all-cash buyer; or You're already pre-approved for a mortgage; and You don't have a present house that has to be sold before you can afford to buy. In those circumstances, you may be able to negotiate some discount from the listed price. On the other hand, in a hot seller's market, if the perfect house comes on the market, you may want to offer the list price (or more) to beat out other early offers.

It's very helpful to find out why the house is being sold and whether the seller is under pressure. Keep these considerations in mind Every month a vacant house remains unsold represents considerable extra expense for the seller; If the sellers are divorcing, they may just want out quickly; and Estate sales often yield a bargain in return for a prompt deal.

You will need earnest money. This is a deposit that you give when making an offer on a house. A seller is understandably suspicious of a written offer that is not accompanied by a cash deposit to show good faith. A realtor or an attorney usually holds the deposit, the amount of which varies from community to community. This will become part of your down payment.

Seller's response to your offer You will have a binding contract if the seller, upon receiving your written offer, signs an acceptance just as it stands, unconditionally. The offer becomes a firm contract as soon as you are notified of acceptance. If the offer is rejected, that's that, and the sellers could not later change their minds and hold you to it.

If the seller likes everything except the sale price, or the proposed closing date, or the basement pool table you want left with the property, you may receive a written counteroffer, with the changes the seller prefers. You are then free to accept or reject it or to even make your own counteroffer. For example, We accept the counteroffer with the higher price, except that we still insist on having the pool table.

Each time either party makes any change in the terms, the other side is free to accept or reject it, or counter again. The document becomes a binding contract only when one party finally signs an unconditional acceptance of the other side's proposal.

Withdrawing an offer Can you take back an offer In most cases the answer is yes, right up until the moment it is accepted, or even in some cases, if you haven't yet been notified of acceptance. If you do want to revoke your offer, be sure to do so only after consulting a lawyer who is experienced in real estate matters. You don't want to lose your earnest money deposit, or find yourself being sued for damages the seller may have suffered by relying on your actions. For Your Home

For sellers calculating your net proceeds When an offer comes in, you can accept it exactly as it stands, refuse it (seldom a useful response), or make a counteroffer to the buyers with the changes you want. In evaluating a purchase offer, you should estimate the amount of cash you'll walk away with when the transaction is complete. For example, when you're presented with two offers at once, you may discover you're better off accepting the one with the lower sale price if the other asks you to pay points to the buyer's lending institution. Once you have a specific proposal before you, calculating net proceeds becomes simple. From the proposed purchase price you can subtract Payoff amount on present mortgage; Any other liens (equity which is a homeowner's financial interest in a property, equity is the difference between the fair market value of the property and the amount still owed on its mortgage and other liens, loan, judgment, that is, a decision made by a court of law, in judgments that require the repayment of a debt, the court may place a lien against the debtor's real property, that is, land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent rights thereof, as collateral for the judgment's creditors); Broker's commission; Legal costs of selling (attorney, escrow agent); transfer tax which is state or local tax payable when title passes from one owner to another, es; Unpaid property taxes and water bills; If required by the contract cost of survey, termite inspection, buyer's closing costs, repairs, etc.

Your present mortgage lender, that is, a term which can refer to the institution making the loan or to the individual representing the firm, for example, loan officer, that is, also referred to by a variety of other terms, such as lender, loan representative, loan rep, account executive, and others, the loan officer serves several functions and has various responsibilities they solicit loans, they are the representative of the lending institution, and they represent the borrower to the lending institutions are often referred to as lenders, may maintain an escrow account which is once you close your purchase transaction, you may have an escrow account or impound account with your lender, this means the amount you pay each month includes an amount above what would be required if you were only paying your principal which is the amount borrowed or remaining unpaid, the part of the monthly payment that reduces the remaining balance of a mortgage, and interest, the extra money is held in your impound account (escrow account) for the payment of items like property taxes and homeowners insurance when they come due, the lender pays them with your money instead of you paying them yourself, into which you deposit money to be used for property tax bills and homeowner's insurance premiums. In that case, remember that you will receive a refund of money left in that account, which will add to your proceeds.