What Everyone Ought to Know About Writing an Offer

Posted on: October 08, 2007

When buyers decide upon the right property, the next step is to execute a purchase agreement. This is often referred to as “writing an offer.” (Unfortunately, the very terminology seems to hint at offering less than the purchase price. This is not always true. Sometimes the offer is over the asking price, depending upon the current market conditions.)

The proposal, or offer, should contain specific conditions upon which the transaction will close. In Oregon, we utilize a form approved by the State which covers the majority of the issues most buyers and sellers want addressed. These include the proper identification of the parcel and the purchasers and sellers, the condition of the title, the financing contingency, inspections, closing and possession dates, personal property included, and any additional conditions placed upon the sale by the parties involved. In order to cover all of the contingencies and conditions in an ordinary sale, the forms range anywhere from 8 to 15 pages long. Clearly, it is advisable to have professional help when preparing the offer to purchase.

The paperwork contains protections for both the buyers and the sellers. The sheer length of the agreement, although intimidating to many, is intended to cover a greater level of protection to the consuming public. The continual revision of the purchase agreement, when combined with the statutorily required disclosure documents, has diminished the number of disputes in our marketplace.

A goodly portion of the purchase agreement commonly in use in Oregon deals with dispute resolution. In the unhappy event of a problem, buyers and sellers agree to settle their differences by arbitration or mediation, rather than immediately seeking a court decision.

In tendering offers to purchase, it seems that more is better. When I started selling 31 years ago, the purchase agreement was one page long and there was no such thing as mandatory disclosure. Caveat emptor (buyer beware) was the law of the land. Fortunately, things have changed for the better.

Article written by Don McCredie, G.R.I., CRS; he is the owner of PortlandRealEstate.com, a Life Member of the Million Dollar Club, and a past REALTOR of the Year for the Portland Metropolitan Association of REALTORS. Currently, he serves as the Broker/Owner of EXIT Acclaim Realty and can be reached at 1-800-203-9898.