The offer form can be called the Purchase Agreement, Deposit Receipt, or Real Estate Purchase Contract and Receipt for Deposit. These are standard forms that are used by the real estate community and are updated to comply with changes in state and local law and to comply with current disclosure laws.

When accepted, the offer creates a legal, binding contract between the buyer and the seller. Because of this, you must make sure that the offer contains all the terms and conditions of your purchase. You will want to stipulate everything that needs to happen before you will purchase the home, including any contingencies that must be met. For example, the offer can be contingent on the buyer obtaining financing at a certain interest rate. If the buyer wants the seller to leave any personal property, these items will need to be written into the agreement.

The contract is typically filled out by the real estate agent representing the buyer. The form contains such terms as price, closing date, financing terms and contingencies. It is advisable for buyers to understand all the terms of the contract before signing the agreement.

Some of the points in the purchase contract include:

• Offering price

• Seller's disclosure obligations

• Repairs to be made by the seller

• Buyer's rights for inspection of the property

• Warrantees with the property

• Legal rights and attorneys' fees

• Breach of contract provisions

• Appropriate earnest money deposit

• Date of transfer of ownership

• Title insurance requirements

• Date and time the buyer will take possession of the property

• Time frames to which all parties must comply

Remember, when signed by all parties, the Purchase Contract is a legally binding agreement that sets forth and establishes the terms of the sale. Orally negotiated items are not enforceable in real estate transactions; in order to be enforced, they must be put in writing. Thus, nothing promised by the seller is enforceable unless it is put into the contract. If the seller says he or she will leave all the patio furniture, for instance, and the buyer expects the furniture, this should be put into the contract. For more detailed information about the specific terms contained in an offer, read the section on contract.

All offers must be made with an earnest money deposit. The deposit can be cash, a cashier's check, or a personal check. The deposit can also be something of value, like jewelry or title to a car; however, most of the time it is a personal check. The check is not deposited or cashed until there is an accepted contract by all parties. Once the offer becomes a contract, the earnest money is deposited either into the Broker Trust Account, the escrow company's account, or given to the seller's attorney to become part of the buyer's down payment at closing. The size of the earnest money deposit will depend on your area's customs and the market conditions.

Before you sign the offer, you should verify that you have sufficient funds for the down payment and closing costs. You may check by using our buyer's calculator. You may have to add some lender's closing costs that are particular to your loan. In most real estate contracts, having the down payment and the closing costs is not a contingency of the sale. So you don't want to be short on cash at closing.

Once you have written your offer, it should be presented to the seller as quickly as possible. If you are using a real estate agent, be aware that every region has different customs for presenting the offer. In some areas the buyer's agent presents the offer to the seller's agent, and the seller's agent presents the offer to the seller. In other areas, the buyer's agent and seller's agent present the offer to the seller together. If you are not represented by an agent, then you need to present your offer directly to the seller. When presenting the offer, you should emphasize its positive aspects, such as pre-approved loan, or your ability to close quickly or to make a large deposit.

Once you have presented your offer to the seller, the seller will need to respond to your offer. The length of time a seller has to respond to the offer is described in the offer. For example, the offer might read, "The seller has until 5:00 p.m. on May 2 to respond to this offer. If the seller does not respond within the time frame stated in the offer, the offer is automatically revoked." The buyer can revoke his or her offer anytime prior to the seller accepting the buyer's offer. The seller has three options for responding to the offer: reject the offer or let it expire, accept the offer, or make a counteroffer.

Rejecting the offer

The seller should make a notation on the buyer's contract that he or she is rejecting the offer, and should sign the rejection. Do not sign in the seller's acceptance area. The seller then should communicate the rejection to the buyer.

Accepting the offer

If the seller accepts all of the buyer's terms and conditions, then he or she should sign in the acceptance area of the contract. However, the acceptance should also be communicated to the buyer prior to the expiration of the offer. Communicating the acceptance to the buyer is a requirement of contract law. In practice the buyer's agent calls immediately to tell you that the seller has accepted your offer, and presents you with or faxes you a copy of the accepted offer.

Countering the offer

Writing a counteroffer to the buyer's offer is the same as rejecting the original offer and writing a new offer. Once an offer is rejected it is dead and the seller cannot change his or her mind. For additional information, click on counteroffers.

Multiple offers

In a seller's, or "hot" market, there are more buyers than there are properties for sale. This usually occurs when the local economy is strong. Prices go up as buyers are willing and capable of paying more and the time houses remain on the market is shorter. For additional information, click on multiple offers.