it before you enter into a binding contract.
The questions raised in this publication
are of special concern to real estate purchasers.
Consequently, they are posed from the standpoint of
the purchaser.
Q: I have found a home I am interested in
buying. How do I make an offer to purchase it?
A: Typically, you will complete a standardized offer
to purchase form with the help of a real estate broker
— probably a buyer agent. This form will express the
terms of the purchase (purchase price, closing date,
etc.) that you are proposing to the seller. The most
common residential offer form in North Carolina is
the “Offer to Purchase and Contract” (Form No. 2-T),
jointly approved by the N.C. Bar Association and
NC REALTORS
®
. Many standard “addenda” forms
also are available to add provisions of special
importance to the parties. Your real estate broker
may have a variety of these forms, but if a standard,
preprinted form is not available covering the specific
terms of your offer, you should consult a private
attorney to draft an appropriate document for
your use. Real estate brokers are not permitted to
draft contracts or even special provisions such as
contingencies.
Q: Does my offer to purchase have to be in
writing?
A: To be enforceable, real estate sales contracts in
North Carolina must be in writing. Since only written
offers may become binding contracts, your offer
should be in writing and signed.
Q: What should be in my offer?
A: At a minimum, your offer must clearly identify you
and the seller, and state the sales price, and closing date
Questions and Answers on:
O F F E R A N D A C C E P T A N C E
The purchase contract is the most important
document in any real estate sale. It must reflect the
entire agreement between the buyer and seller. This
brochure examines issues arising during contract
negotiations in residential real estate sales transactions.
In particular, it focuses on “offer” and “acceptance”:
the process by which a buyer and seller create a
binding legal contract. This process typically begins
when a prospective buyer makes an offer. Then, the
seller either accepts it, rejects it, or rejects it and makes
a counteroffer. Then the buyer has the same options
(i.e., accept, reject without making a counteroffer, or
reject with a counteroffer). When one party accepts
the other party’s offer or counteroffer, including
communicating that acceptance to the offering party, a
purchase contract is created.
Any misunderstandings concerning offer and
acceptance can result in serious legal and financial
consequences for the buyer and seller. Therefore, it
is imperative that you carefully read and understand
the entire purchase contract and that you consult an
attorney if you do not understand any issues regarding
and all of the terms agreed upon by you and the seller.
It must also contain an adequate legal description of the
property (for example, a reference to a recorded plat
map or deed) — a street address alone is not sufficient.
There are many other important provisions you should
consider. For example, to ensure that items or features
of the property you have seen in advertisements
or MLS information are included in the sale, you or
your broker should list them in your offer. Any form
contract supplied to you by a real estate broker must
include at least nineteen separate required provisions.
The standard form “Offer to Purchase and Contract”
includes all these and many more.
Q: Must my offer include earnest money?
A: Earnest money is not required to make a binding
real estate sales contract. However, it is a common
practice for a buyer to include it with an offer because
it shows the buyer’s good faith, demonstrates some
available cash, and makes it more likely that the seller
will accept the offer. Real estate brokers must deposit
earnest money checks no later than three banking days
after acceptance of the offer, but they may be deposited
earlier at any time after receipt. So, be sure your
earnest money check is good at the time you write it.
(For more information on earnest money deposits, see
the Commission’s brochure, “Questions and Answers
on: Earnest Money Deposits.”)
Q: How will my offer be communicated to
the seller?
A: The real estate broker with whom you are working
must deliver it to the seller’s broker or directly to the
seller if the seller has no broker. The seller’s broker
must present it to the seller.
Q: How does acceptance occur?
A: To accept your offer, the seller must sign it without
making any changes. Until you or your broker have been
notified that the seller has signed your offer, you can
withdraw it at any time — even if you have given the
seller a deadline by which he or she must respond.
Q: Once the seller has signed my offer, does it
become a contract?
A: No. It does not become a binding contract until
the seller (or seller’s broker) has notified you (or your
broker) that the seller has signed it. If your broker
informs you that the seller has “verbally” accepted or
will accept your offer but has not yet signed it, there is
no enforceable contract.
Q: How will I be notified of the seller’s
acceptance of my offer?
A: Unless the contract specifies the manner in which
acceptance is to be given, it may be communicated in a
— even if your offer was submitted first and is for a
higher purchase price. A broker is required to deliver
all offers promptly. In order to obtain for their seller-
clients the best possible bargain, the seller’s broker
will usually inform competing prospective buyers that
other potential buyers are interested in the property.
To treat competing prospective buyers fairly, the
seller’s broker may not divulge the price and terms of
competing offers without the express authority of the
offering party. Whether you have been informed of
competing offers or not, you should not assume that
your offer will receive special consideration or that you
are the only buyer who is interested in the property.
Q: What else might happen to my offer after I
submit it to the seller?
A: It may simply expire if you include an expiration
date in the offer (or within a reasonable period of
time if no deadline is set). It is terminated if the seller
sells or contracts to sell the property to someone else.
Otherwise, unless you withdraw it, the offer remains
an offer.
Q: What happens if the sales transaction does
not close?
A: If you terminate the contract before the due
ROLL FOLD...
DOUBLE CHECK ADJUSTMENTS FOR ROLL FOLD... 1/16" creep.
MAKE ADJUSTMENTS FOR DOT GAIN.
variety of ways including orally by the seller or seller’s
broker, by personal delivery of the signed offer, mail,
facsimile (fax) or electronic mail. If you’re told that the
seller has accepted your offer, ask whether the seller has
signed it, and ask for a signed copy of the contract. Your
real estate broker must furnish it to you.
Q: What if the seller changes my offer in some
way and then signs it?
A: If the seller makes any changes in your original offer,
the offer is rejected and cannot later be accepted. By
making changes to the original offer, the seller is, in
fact, making a counteroffer to you which you can either
accept, reject without making a counteroffer, or reject
and make your own counteroffer. The process can
continue in this manner indefinitely. You and the seller
should initial and date all changes made during the
negotiation of an offer. If the offer becomes too “messy”
as a result of many changes, re-type the offer in its final
form before signing it.
Q: What happens if someone else makes an
offer to purchase the property before the seller
accepts my offer?
A: Until the seller signs your offer and notifies you
or your broker that it has been signed, the seller can
consider and accept an offer from a competing buyer
Continued