by Dian Hymer
What an unpleasant surprise it can be to lose a home to another buyer just when you thought the negotiations with the sellers were all firmed up. To avoid this aggravating situation, keep the following ground rules in mind.
In most cases, the sellers aren't obligated to sell you their home until your purchase offer is signed by them and their signed acceptance is actually delivered back to you or to your agent. Until this occurs, the sellers are free to listen to other offers and to accept one from another buyer if they want to.
Once the seller's acceptance has been delivered to you, or to your agent, you have a binding contract. Then the sellers usually can't sell their home to someone else unless you and they agree to cancel the contract.Purchase contracts are rarely accepted by sellers without some modifications. Changes are accomplished through a counteroffer process. Buyers and sellers use counteroffers to propose modifications that they want included in the contract.
Let's say you offer to buy a house for $250,000. Briefly, the other terms of your offer are: a 30 day close, a $5,000 credit for a new roof and the sellers are to give you a termite clearance. The sellers accept the price and agree to give a termite clearance. But they counter you with a 60 day closing and a credit of $2,000 for the roof. You accept the roof credit, but counter with a 45 day closing, and the sellers accept.
Through this counteroffer process, buyers and sellers hammer out a mutually acceptable deal. However, up to that point, other buyers are free to intercede. If the sellers hear an offer they like better than the one they're working on with you, they can withdraw their counteroffer at any time up until the time that you sign it and deliver signed acceptance back to them.
First Time Tip: When you're in the midst of negotiations to buy a home, make sure that you're in constant contact with your agent. If you have to leave town, make arrangements so that your agent can call you and send you a fax if necessary. This is particularly important if the home you're trying to buy is in high demand.
Don't get lulled into a false sense of confidence by verbal promises. In the world of home buying and selling, verbal promises aren't binding. For example, let's say that your offer is presented to one of two sellers. The other seller is out of town and unreachable. The seller who's in town says he doesn't see anything wrong with your offer, but it can't be signed by both sellers until the next day.
Without a power of attorney to act on a partner's behalf, one seller usually can't sign for the other. In most cases, a binding (also called ratified) contract requires the signatures of all owners.
Facsimile signatures are binding if the purchase contract provides for this. Make sure that this provision is included in your purchase agreement so that you don't have to wait for signatures.
Even after sellers have entered into a binding contract, they are entitled to listen to other offers. But subsequent offers have to be accepted in backup position subject to the collapse of the first offer.
The Closing: Real estate laws and customs vary from one area to the next. Consult a knowledgeable real estate professional -- agent or attorney -- if you have any questions about the priority of your contract or the status of your negotiations.
. Questions of a Do It Yourself nature should be submitted our "