The seller said YES. Congratulations! You Have "An Accepted Offer"
What happens next?
- If you have not already retained an attorney to represent you, now is the time to do so.
- A Memorandum of Agreement is prepared by the brokers outlining the terms of the mutual agreement. The Memorandum is sent to the seller, the seller's attorney, you and your attorney.
- The seller's attorney prepares the contract of sale (based upon the information provided in the Memorandum of Agreement) and sends it to your attorney after the engineering inspections have been completed.
- Once your attorney receives the contract he/she will review it and then discuss any modifications he/she wishes to make with the seller's attorney.
- You will sign the contract and give the earnest money deposit that is specified in the contract. The signed contract and earnest money deposit check are then returned (usually via Fed-Ex) to the seller's attorney. Note: The customary earnest money deposit is 10% of the purchase price. It is typically held in the seller's attorney's escrow account until the closing.
- The seller signs the contract and returns a fully executed copy to your attorney.
- Once you receive the fully executed contract, you can submit your application for a mortgage and proceed toward satisfying any other contingencies that remain in the contract.
An accepted or acceptable offer is a non-binding, verbal, "handshake" agreement. Neither party is obligated to the other until contracts are fully executed, and delivered to both buyer and seller.
Most Memorandums of Agreements include a disclaimer similar to the following at the bottom of the page:
Purchaser understands and acknowledges that if owner verbally accepts purchaser's offer that such acceptance is not binding on the owner until a written contract between purchaser and owner has been fully executed and delivered. Owner has the legal right to accept any other offer or to make counteroffers to other prospective purchasers until a contract has been fully executed.
GOOD NEWS - BAD NEWS:
NOTE: This is the customary protocol & sequence of events for residential real estate transactions in Westchester County, NY. Different customs, procedures and laws in other counties or states may cause the sequence of events to be quite different from what is described above. If you are purchasing a home outside of Westchester County, check with your Realtor regarding local protocols.
- The good news is that if a better house becomes available before contracts are signed, you are 100% free to purchase it.
- The bad news is that if a better offer is made, on the house on which you are bidding, before contracts are signed, the seller is 100% free to accept it.
© Copyright 2007 Bill Boeckelman Publications