Pennsylvania Buyer Offer Docs 101
Congratulations! You found the house of your dreams and now it’s time to make an offer!
After you’ve reviewed all your key offer details with your agent, settled on an offer price, closing date, financing and mortgage terms, the next step in this process is to get it all on paper!
In 2021 it’s very rare to print and sign physical offer documents -- most likely you’ll receive everything in a Docusign envelope to review and sign! Chances are you probably won’t meet your agent in person to review documents either, so once you get that document email you are bound to have questions, “What am I signing? Why am I signing this? What does it all mean? What’s this fee? Title? Do I need insurance? You get the picture. When you work with us as your agents, we’ll be there as your guide, and can review each document with you over phone, Zoom, or email to make sure you understand exactly what you’re singing.
Here’s a crash course in Documents 101, summarizing what we might share over the phone when actually reviewing with you - an explanation of what’s included in your offer packet and why we need it. We get it. It’s a bit daunting reviewing these documents. All the information seems overwhelming. Some of these documents are office forms and some are mandated by the State (I wish there were less too… haha!) Here we go!
Consumer Notice - Discloses the variety of agent / client relationships and what each entails. This is not an agreement to agent representation, simply a disclosure providing you with all the background you need to make an informed decision about what type of representation would be most appropriate for you and your situation. Think of it as an introduction to your buyer’s agency contract.
Exclusive Buyer Agency Contract - The buyer’s agency contract is an agreement between you and my broker, with me working with you as my broker’s representative. Essentially it states that I am working with you as your buyer’s agent, you are not working with another agent and you agree to that representation; as well as a disclosure of our broker’s flat fee that you will also see reflected in your estimated closing costs worksheet.
Agreement of Sale - this is the Biggie, a contract that lays out all the terms and conditions for the transaction - once you sign it will be known as the "offer" - if and when seller counter signs that is what is called "fully executed" and the days start counting for the various terms within the document; the fully signed version is the Agreement of Sale and becomes the roadmap for the terms and pace of the transaction.
Deposit Money Notice - This form explains that we will be submitting your deposit to the listing brokerage to be held in escrow until settlement. Know that neither your agent, the other party's agent nor the seller holds this deposit. It is held securely in an escrow account either at the seller’s brokerage, or in some cases, the Title Co. you chose to use.
Wire Fraud Notice - Please review this document carefully. Wire fraud is rampant in our industry and it’s critical to understand the routes for sending and receiving wiring instructions that give you the most security. You might decide to wire your deposit as opposed to sending or dropping off a check. It can be done safely, but we want you to be advised of the steps and follow the directions thoroughly.
Buyer Financial Statement - or BFI - this is intended to give the seller a snapshot of your finances and demonstrate your strength as a potential buyer. Please answer each of the yes/no questions that start the form. You are not required to disclose all of your assets, but it's a good idea to show your financial strength (such as showing enough savings to cover closing costs, the down payment, your annual salary, any bonuses, things like that), you should not write any bank account numbers or credit card numbers; if a section does not apply to you leave blank, write a dash or N/A
Estimated Closing Costs - This breaks down some of the expected costs you’ll encounter in your purchase. This is only an estimate and should not be relied on in any way as final.
Sellers Disclosure - The seller’s written statement on the property’s condition, please review carefully and acknowledge each page with your initial. This will usually cover all known repairs, renovations and mechanicals present in the property. While you’re reviewing, you may have questions or need clarification on certain items, which your agent can relay to the sellers through their agent.
Lead Disclosure - Required for all properties built in 1978 or earlier, the lead paint disclosure will indicate whether or not the seller has any knowledge or reports of lead paint within the home.
MLS Printout - a copy of the public description the home is being marketed with, please review and acknowledge with your initials.
Tax Records - Available tax records for the property. Please review and acknowledge with your initials.
Phew… that was a lot.
Once you’ve reviewed and signed everything, we’ll submit to the seller's agent along with your pre-approval. They can accept as it is written or counter any of the price or terms. In any case, we always have the right to discuss your options and go back with a counter proposal.
If you don’t get the first home you put an offer on, don’t worry, many of these documents do not need to be signed again. We can save your signed consumer notice, buyer’s agency agreement, and buyer’s financial information documents for future use when you find the right home!
Have more questions about how it all works? We’d love to talk about it with you! Email, call, or text any questions you have (seriously!)
Q@qanduteam.com or 267.607.9176