Whiteboard Wednesdays #10 — NC Offer To Purchase And Contract
When buying a home, the amount of legal documents and numbers involved can be enough to make your head spin! But with a bit of patience and understanding, you can navigate the process with confidence.
To help you do so, we’re breaking down the first page of an NC Offer to Purchase and Contract – here are the numbers you should understand, and how they work together:
- Purchase Price – this first (and largest) number is equivalent to the actual purchase price of the home.
- Due Diligence Fee – required by many sellers, this is what you as the buyer pay to have the opportunity to do your due diligence. This fee is not refundable, but is applied to the purchase price should you ultimately buy the home.
- Initial Earnest Money Deposit – this deposit is refundable, and is applied to the purchase price of the home. It is essentially a certain amount of “good faith” money that demonstrates to the seller that you as the buyer are committed to purchasing the home.
- Additional Earnest Money Deposit – in cases where additional funds are required to demonstrate a continued committment to the purchase, an additional EMD might be placed in an escrow account, to be refunded in the event of a failure to close or applied to the purchase price at close.
- Assumption – this field will be null unless the buyer will be assuming a loan with the sale.
- Seller Financing – if seller financing is a factor, the relevant dollar amount will be reflected here.
- Building Deposit – if the property is new construction, a building deposit will be required and accounted for here.
- Balance Due at Closing – this is the actual dollar amount that the buyer will owe at the closing table, and is calculated as the value of item 1 minus the sum of values 2-7.
One final tip to bear in mind – always double-check your numbers, and, if possible, get a second pair of eyes to do the same!