Real estate purchase agreements will include similar terms and steps; whether you’re using a real estate agent or going For Sale By Owner (FSBO).


An offer to purchase real estate is a document that outlines proposed terms and conditions between a buyer and a seller. Once the offer is signed by both the buyer and seller, it then becomes a legally binding purchase agreement.


An offer will include items such as a closing date, contingencies, and financing requirements. The terms and contingencies included in a purchase agreement may indicate the likelihood of a successful transaction. It’s important for buyers and sellers to understand the components of an offer in order to ensure the offer meets their needs. If using fsboHandshake to transact a real estate purchase, buyers and sellers are provided custom contingency options to stay protected. The following items, described below, are commonly found in an offer to purchase real estate.



Offer Amount


When deciding upon an offer amount, buyers can search for similar homes in the area (size, location, condition, etc.) and what they were sold for. If financing, be sure to speak to a lender prior to making an offer and receive either a pre-qualification or pre-approval letter. A pre-approval letter will strengthen your offer by letting a seller know that you are a serious buyer. Many sellers choose to only accept offers from pre-qualified or pre-approved buyers.



Earnest Money


Earnest money is essentially good faith that a buyer is committed to purchasing the property. It is typical in a real estate transaction for a seller to require earnest money. A buyer will deposit earnest money into an escrow account, created by the escrow agent, soon after an offer is accepted. The earnest money will go towards a buyer’s down payment at closing.



Closing Date and Possession Date


In many cases, the closing date is 45 days from the acceptance of an offer. Title companies and lending agencies will typically need at least 45 days to complete all the necessary steps to close (running title searches, reviewing appraisals, loan applications, etc). Possession date typically occurs on, or one day after, the closing date.



Contingencies (Conditions)


It is typically in the buyer’s best interest to include contingencies in an offer. Contingencies protect a buyer in the case of unforeseen problems that may occur during the purchase process. Common conditions included in offers are:  the sale of current property, a physical home inspection, an appraisal, financing, high risk area assessment, a clear title, seller home disclosure, and a final walk through. Sellers typically include a contingency for a timeframe for when a buyer must deposit the earnest money. A seller may favor an offer with fewer contingencies in order to reduce the potential for delaying the closing process. However, it is fairly common for buyers to include multiple contingencies in an offer. Purchasing a home is a big investment and contingencies will protect a buyer from potential risk.  





There are numerous ways in which a  buyer may purchase a home. First, there is a cash offer. A cash offer is generally favored by sellers as they do not have the same restrictions as lender-financed offers. Offers that require lending may have the potential to fall through; a buyer’s financial situation may change, the lender’s requirements could change, or an appraisal can come in below value.

However, many offers are made with lender-financing restrictions that result in successful closings.


There are different financing options available to buyers. Sellers will typically favor an offer with a conventional loan and 20% down. Conventional loans indicate that a buyer has a credit score of at least 700. Federal Housing Administration (FHA), VA, Adjustable Rate Mortgage (ARM), and USDA loans are all options a buyer may use to purchase a home. These lending options tend to require little-to-no down payment, as well as indicate a buyer’s credit score of below 700.



Who Pays for What: Closing Costs


Real estate transactions cost money. Title companies, escrow agencies, appraisers, local agencies and prepaid items are all due at closing. A seller and buyer will decide who pays for each closing cost. fsboHandshake provides standard terms by pre-selecting the portion a buyer or seller will pay for a specific closing cost.


Plan ahead to ensure funds are available at closing. Closing costs are no small amount, and can be 3-5% of the total sales price of the property. The amount will vary depending on a buyer’s financing requirements, the title and escrow fees, as well as the property’s location and value. The escrow (or title) agent will provide a settlement statement, typically within a week of closing, that will outline each fee amount. Be sure to review the accuracy of this statement, and which party is responsible, prior to signing.







Whether you are submitting or receiving an offer, be sure to understand the implications of items included in the offer. Once signed, a purchase agreement is considered a legally binding contract. For a custom, step-by-step guide to creating and receiving offers, please visit  




fsboHandshake simplifies For Sale By Owner (FSBO) transactions