Offer Components
Every purchase offer includes fundamental elements that define the transaction.Purchase price
Purchase price
The amount you’re offering to pay. Your agent advises on pricing strategy based on market conditions, comparable sales, competition, and property condition.
Earnest money
Earnest money
A deposit demonstrating serious intent to purchase. Typically 1-3% of purchase price. This money is held in escrow and applied toward your funds due at closing.
Contingencies
Contingencies
Conditions that must be met for the contract to proceed. They protect you from losing earnest money if specific problems arise. Common contingencies include financing, inspection, appraisal, and title.
Closing date
Closing date
When the transaction will be completed and ownership transfers. Most financed purchases close 30-45 days after contract execution.
Possession
Possession
When you take physical possession of the property. Usually at closing or the day after, though other arrangements can be negotiated.
Inclusions and exclusions
Inclusions and exclusions
What transfers with the property (appliances, fixtures, window treatments) and what the seller is keeping. When in doubt, specify in writing.
Purchase Contracts
Key terms, standard provisions, and what to review before signing
Contingencies Explained
Contingencies protect you by allowing contract termination if specific conditions aren’t met. Your earnest money is typically returned if you terminate under a valid contingency.| Contingency | What It Protects | Typical Timeframe |
|---|---|---|
| Financing | Loan denial | 21-30 days |
| Inspection | Property defects | 7-14 days |
| Appraisal | Value shortfall | Tied to financing |
| Title | Ownership issues | Through closing |
| HOA review | Association problems | 3-7 days |
Addendums and Contingencies
How contingencies work, when to use them, and what happens when they expire
Waiving Contingencies
In competitive markets, buyers feel pressure to waive contingencies to make offers more attractive. Understand what you’re giving up before you waive.Waiving financing contingency
Waiving financing contingency
If your loan is denied, you may lose your earnest money. Only consider this with unconditional loan approval already in hand.
Waiving inspection contingency
Waiving inspection contingency
You accept the property as-is with no opportunity to negotiate repairs or terminate based on defects. Consider a pre-offer inspection if you’re waiving this contingency.
Waiving appraisal contingency
Waiving appraisal contingency
If the property appraises below purchase price, you must cover the gap with additional cash or lose your earnest money. Only consider with significant cash reserves.
Shortening contingency timelines is often safer than waiving entirely. A 7-day inspection contingency still protects you. No contingency means no protection.
What “Under Contract” Means
When the seller accepts your offer, the property is “under contract.” This creates legally binding obligations for both parties. What happens immediately:- Contract is executed (signed by all parties)
- Title company opens escrow
- Earnest money deadline begins
- Contingency timelines start
- Lender begins processing your loan
Your obligations
Your obligations
- Deposit earnest money within deadline (typically 3 business days)
- Schedule inspections within contingency period
- Provide documentation to lender promptly
- Meet all contingency deadlines
- Close on the agreed date
Seller's obligations
Seller's obligations
- Remove property from active marketing
- Provide agreed disclosures
- Maintain property condition
- Complete agreed repairs
- Transfer ownership at closing
The 3-Day Earnest Money Deadline
Once your offer is accepted, earnest money is typically due within 3 business days. This is often the tightest deadline in the entire transaction. Why this matters: Missing the earnest money deadline may constitute breach of contract. The seller could terminate and pursue legal remedies. What you need to have ready:- Title company selected and contact information confirmed
- Wire transfer process understood
- Verification phone number for wire instructions (looked up independently, not from email)
- Funds available and ready to transfer
Where Earnest Money Goes
Earnest money is deposited into an escrow account held by the title company. Neither you nor the seller can access these funds until the contract terms authorize release.If the transaction closes
If the transaction closes
Earnest money applies toward your funds due at closing. It reduces the amount you bring to the closing table.
If you terminate under a valid contingency
If you terminate under a valid contingency
Earnest money is returned to you. The specific contingency language determines the process.
If you breach the contract
If you breach the contract
The seller may be entitled to keep your earnest money as damages. Contract language determines how disputes are resolved.
Earnest Money
Complete guide to protecting your deposit and understanding when it’s at risk
Negotiation Basics
Offers often go through negotiation before reaching agreement.Seller responses to your offer
Seller responses to your offer
- Accept - Contract is executed as written
- Reject - No deal; you can submit a new offer or move on
- Counter - Seller proposes different terms; you can accept, reject, or counter back
Common negotiation points
Common negotiation points
- Purchase price
- Closing date
- Earnest money amount
- Contingency terms
- Included items
- Repair requests
- Seller concessions toward closing costs
Competitive market considerations
Competitive market considerations
Multiple buyers may submit offers simultaneously. Your agent advises on strategy, but ultimately you decide how aggressive to be and which protections to keep or sacrifice.
After Acceptance
Once the contract is executed, move quickly on these items:1
Wire earnest money
Contact title company to confirm wire instructions by phone. Verify using a number you look up independently. Wire funds within the deadline.
2
Schedule inspection
Contact your inspector immediately to schedule within the contingency window. Don’t wait until the last days.
3
Provide lender documentation
Your lender needs the signed contract to begin processing. Provide any additional documents requested promptly.
4
Review disclosures
Seller provides property disclosures. Review carefully and ask questions about anything unclear.
5
Track deadlines
Create a calendar of all contingency deadlines. Missing one can cost you money or protection.
Learn More
Purchase Contracts
Key terms, provisions, and what to review
Contingencies & Addendums
How contingencies work and when to use them
Earnest Money
Protecting your deposit and understanding when it’s at risk
Title & Escrow Overview
Understanding who holds your funds and manages closing
Next: Due Diligence
Inspections and appraisals that protect you before you commit