Frequently Asked Questions: Real Estate Law
What is an offer to purchase real estate?
The Offer to Purchase Real Estate document (Offer) is typically a preliminary document in the buy/sell transaction, which the parties enter into, which if properly drawn, is subject to the parties executing a subsequent, more detailed and comprehensive purchase and sale agreement (Agreement) for the purchase and sale of the real estate.
However, courts have determined that the Offer document, if it does not have the necessary language setting forth that it is only a preliminary document, can be binding on the parties as an enforceable contract. The Offer usually does not contain all of the necessary terms, conditions and provisions that should be contained in a properly drawn Agreement, when parties are either selling real estate or buying real estate, thus the reason why the Offer document should always clearly set forth that the Offer is contingent upon and subject to the parties’ executing a mutually satisfactory Agreement.
Many times parties skip over the signing of an Offer document and instead go immediately into executing the Agreement. As noted above, the Agreement is one of the most critical documents in a real estate transaction, since it establishes both the Buyer’s and the Seller’s rights, remedies, obligations, etc. going forward in the transaction. Oftentimes, the Agreement is drawn/prepared in such a way that it is more favorable to either the Seller or to the Buyer. For that reason, whether you are buying real estate or selling real estate, the Agreement should be reviewed by legal counsel, at Coogan Smith, LLP, to be sure that the proper and necessary provisions are set forth in the Agreement which will protect your rights (either as a Buyer or Seller) and provide you with the necessary rights and remedies, to adequately protect all of your interests, in the event that the Agreement falls apart, or the transaction does not go forward. Otherwise, you may find yourself in jeopardy of losing your deposit funds, as a Buyer, or facing a lawsuit for specific performance, either as a Buyer or Seller.