- Offer to Purchase – A buyer's written offer to purchase real estate. The offer should include the legal address of the property, the offer price, any contingencies including the type of mortgage financing the buyer will use to purchase the home, any special terms and conditions, and a date for closing. A good faith deposit typically accompanies the offer. Your real estate sales professional can provide guidance on other elements of the offer. Once the buyer has made the bid, the seller has the opportunity to accept, decline, or make a counter-offer. If the offer is accepted in writing, buyer and seller have a ratified sales contract.
- Home Inspection - A thorough inspection by a licensed professional Home Inspector who evaluates the structural and mechanical condition of a property. A satisfactory home inspection is often included in the offer as a contingency by the purchaser.
- Purchase and Sale Agreement (also referred to as a "P & S") - A written contract signed by the buyer and seller stating each parties terms, conditions and obligations under which a property will be sold. The Purchase and Sale Agreement is a legal and binding contract drafted and signed after the Offer to Purchase. Amongst other legalities, it includes: description of the property, purchase price, earnest money deposit, financing conditions, closing date and any other important dates or provisions agreed upon by buyer and seller.
- Appraisal – A written verification of value for the lender. The purchaser's lender will send out a licensed appraiser to evaluate the property, at the purchaser's expense. The appraiser will inspect the home inside and out to determine that the value is a reasonable one based on other comparable sales in the area. This is only applicable if the purchaser is taking a mortgage of course.
- Deed - The legal document conveying title to a property. The deed transfers ownership from seller to purchaser. Only the seller signs the deed at closing, and the buyer receives a copy of it. The closing attorney will record the original deed on closing day at the Registry of Deeds.
If you buy and sell homes all the time, these terms have likely become commonplace. However, if you have not bought or sold in a while hopefully these terms will help to make you feel more comfortable about the process. If you have questions about any other Real Estate terms, ask your Realtor - they are the experts!