Sellers: How to Read a Purchase Offer on your Property

Posted by on Monday, September 22nd, 2014 in Blog, Real Estate Basics, Uncategorized

You’ve gotten an offer from a buyer on your property! Now, what does it all mean? Watch the video above for an explanation and find a brief summary below.

The purchase offer generally consists of:

  • Residential Purchase Agreement (RPA) – 8 pages
  • Disclosure forms
  • Wood Destroying Pest Addendum (or Termite Addendum)
  • There may be a couple other documents included

Besides of course, the purchase price, one important set of items to note on the RPA are the division of costs (page 2). It is common for the seller to pay any transfer fees from the city, county, or HOA; natural hazard report; and termite inspection. Generally the buyer and the seller split the escrow and title fees. The buyer generally pays for any other inspection costs.

The other very important things to note on the RPA are the loan contingency (page 2) and the inspection contingency (section 14). The inspection contingency says how long the buyer has to inspect the property. These contingencies dictate how long the buyer has for an “out” in purchasing the property. Of course, the fewer the days, the better, but I can go through with you expected and reasonable numbers for these items on your property.

The other important form to look at is the Wood Destroying Pest, or Termite, Addendum. It is common for the seller to pay for the termite inspection and Section 1 termite work. It is common for some work to be needed on a Single Family Residence.

If you have any questions, or want any clarification, on the offer, I am of course here to help. And congrats – you are on your way to selling your property!

Click on the graphics below to view the bigger full size versions of these Residential Purchase Agreement pages. This covers the first two pages of the offer, which have the bulk of the fields that change. For questions regarding the rest of the offer, click here.

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