Detail On The Home Buying Process

The following forms need to be completed:

Offer to Purchase
The Offer to Purchase is the first step in buying a house. This is the vehicle to communicate with the Seller what you want to pay for the house and to give a check deposit between $1,000 - $5,000 as consideration.

This check is not deposited until the offer is accepted.    The check is made payable to the listing office or an attorney - the escrow agent.  

Lead Paint Disclosure
The form used to inform and supply the Buyer a copy of the Federal Regulation (Childhood Lead Poisoning Prevention Program CLPPP) and disclosed whether or not the property has been tested for lead paint This is only necessary in homes built prior to 1978. Buyer, Seller and both agents must initial, sign and date forms.

Agency Disclosure
This is a mandatory form to make sure the Buyer and Seller know with whom the fiduciary/statutory duties of the agent are established (Undivided Loyalty, Obedience, Reasonable Care and Diligence, Confidentiality (lives forever), Full Disclosure and Accounting. Buyer signs form with an agent. Seller signs form with an agent. In a “Dual Agency”, where the Seller‘s agent and the Buyer‘s agent are affiliated with the same real estate company, the statutory duties of Undivided Loyalty, Full Disclosure and Confidentiality (regarding the people involved in the transaction - not the property itself) are affected. Any information that either agent has learned about their client is not disclosed.  In most transactions, both agents are compensated by the fee paid by the Seller to list the property.

Building, Radon and Pest Inspections Contingencies
Inspection, Radon and Pest Inspections are usually performed 5 days after accepted offer and the Buyer needs to inform the Seller on the 6th day as to whether there are issues with the inspections. The Buyer hires a building inspector (a Buyer’s agent can help in this process). The cost of the inspection is approximately $400- $1,000 depending on the size of the house.

The inspector usually places radon canisters ($40) or a separate inspector can be hired ($100-150) for a 48-hour period usually in the basement of the property. The difference is that the canisters need to be picked-up and mailed and results can take 48-64 hours and the separate inspector results are immediate.

If there are major issues and the Buyer decides not to proceed with the purchase, the consideration deposit is returned to the Buyer. A Release of Escrow form must be signed by the Buyer and given to the Seller to accomplish this release.

Mortgage Contingency
The mortgage contingency is usually a 30-day period after accepted offer. It is necessary for the Buyer to apply for a mortgage on the date of signing the Purchase and Sale Agreement.
In this market, most Buyers must be pre-approved to be even considered as a potential Buyer. The only component the mortgage contingency applies to is the appraisal of the property. Appraisal of the property cannot take place until a Purchase and Sale Agreement (P&S) is fully executed. If the property does not appraise for the purchase price the Buyer can request to be released from the agreement and the deposit will be returned to the Buyer.

Seller’s Disclosure
The Seller describing the condition of the property provides this. It is necessary for the Buyer to review and initial the bottom of each page and sign thereby acknowledging receipt of the disclosure information.
It is not essential to have this completed to initiate the offer but must be provided after inspections.

Offer is negotiated and accepted
After both parties come to agreement time is of the essence to get both parties to sign and delivered.  At this point the consideration check is deposited.
Make sure you receive a copy of accepted offer. Remember a verbal offer does not secure the property…IT MUST BE SIGNED AND DELIVERED. Faxed or emailed copies are acceptable.

· Addendum A now starts - Building, Radon and Pest Inspections

After inspections are completed and any issues are resolved, the next step is to involve the attorneys. The listing agent initiates a draft Purchase and Sale Agreement (P & S), which is prepared by the listing office or the Buyer's attorney and gives a copy to the Buyer agent.

Purchase and Sale Agreement (P&S)
The Buyer agent emails the fully executed Offer to Purchase and draft P&S to the Buyer’s attorney with the Seller's attorney contact information. The Seller agent emails the fully executed Offer to Purchase and draft P&S to the Seller’s attorney with the Buyer's attorney contact information. The attorneys communicate, and the Buyer’s attorney initiates a final P&S Agreement. The P&S is emailed to the Buyer’s agent and the Buyer, the Buyer signs and gives their agent a check for the remaining deposit.  The Buyer signed P&S is delivered to the Seller’s agent for signatures.
Electronic signatures on all documents is acceptable.

The fully executed P&S is sent by the Seller's Agent to all parties including the Mortgage Company and the check is deposited into an escrow account by the escrow agent.

The agents then give a checklist to both Buyer and Seller defining their responsibilities between the P&S and closing date (frequently called passing of papers) where the property is transferred to the Buyer. 

All items that are permanently attached to the property and itemized on the P&S Agreement remain with the property. Any personal property, items that are not permanently attached to the house and were not included on the P&S Agreement, being sold by the Seller to the Buyer should be done separately.