Following are explanations of those provisions of the Offer to Purchase found on page 3 of this Bulletin which contain errors. For more complete information on the proper completion of the North Carolina Bar Association/North Carolina Association of REALTORS, Inc. Offer to Purchase and Contract form, you are referred to the "Guidelines for Completing Offer to Purchase and Contract Form" available from the North Carolina Association of REALTORS, Inc. office, RO. Box 7918,2901 Seawell Road, Greensboro, North Carolina 27407 (919/294-1415).
1. Buyers' and Sellers' Names. The name of the Buyer should be specific—full name (not nickname) of Buyer and spouse if the spouse is to acquire an interest in the property. Always find out the Seller's marital status and, if married, include the spouse's full name. Ask for a copy of the deed by which the Seller acquired title and ask about any life estates or partial interests.
2. Property Location. Include the full street address and especially the legal description of the property to be sold. An adequate legal description would include reference to a recorded plot or map (lot, block number and name of subdivision, and book and page number of Book of Maps as recorded in the Register of Deeds office); reference to a recorded deed (book and page number); or a metes and bounds description prepared from a survey The description, on its face, should identify a particular parcel of land as distinguished from all other land. The street address alone will not suffice, nor will a mere reference to a tax map.
3. Personal Property. List all personal property which is to be included with the sale of the real property. Don't use general references — describe each item with particularity. If you are unsure as to whether a particular item is legally classified as personal or real property, list it on the contract and specify whether it is to be sold with the property. And if the Seller wishes to exclude certain items that are usually considered to be real property (ceiling fan, light fixtures, etc.), list each item and state that it is to be excluded.
4. Purchase Price. Check your arithmetic carefully to make certain that the sum of the earnest money, any borrowed monies or assumed loans, and the balance of the purchase money equal the total purchase price of the property. Also, state whether the earnest money is being paid in the form of cash, guaranteed funds, personal check, etc., and insert the name of the real estate firm designated to hold the earnest money (usually the listing firm)—not the name of an individual agent of the firm.
5. Conditions. If the Buyer is to obtain financing to complete the purchase, include a specific date by which the Buyer must obtain a firm commitment on the loan. Also specify the type of financing being sought (FHA, VA, Conventional, etc.), the exact term of the loan (15 years, 30 years, etc.), the maximum interest rate which the Buyer will agree to pay, the maximum loan discount points which the Buyer or Seller is willing to pay and any closing costs which the Seller will be expected to pay Never use the terms "prevailing rate," "market rate," "to be negotiated," or similar indefinite terms, and avoid using any real estate jargon or abbreviations which are not generally understood. The Buyer's intended use of the property (single-family residential, multi-family residential, commercial, etc.) should also be stated.
6. Other Provisions and Conditions. Review every provision of the offer with the Buyer and Seller (including those listed on the reverse side of the Standard Form), and make sure that they understand each one. Delete any standard provisions that do not apply or are inconsistent with any special provisions which are inserted. Never leave unused blanks unfilled, indicate inapplicable provisions with "N/A," and insert the word "None" where appropriate. When adding provisions or conditions, be extremely careful to properly identify them and clearly state them. And never include commission arrangements in offers to purchase (Rule A 0112(b)(1)).
7. Closing. Be specific as to the date and place of the closing of the transaction. The closing date should be realistic, taking into consideration the time required for loan approval, inspections, preparation of closing documents, etc. Also recite exactly the names which are to be included on the deed.
8. Possession. Be specific as to when the Buyer can take possession of the property. If the Seller is to continue to occupy the property after closing, then include the daily rental amount which the Seller is to pay to the Buyer during this period. The rent should be commensurate with the Buyer's new house payment.
9. Execution. If the Seller is married, both the husband and wife must always sign the contract. Also, since this contract contains a financing contingency provision, the Buyer's spouse should sign the contract obligating the spouse to subsequently sign the deed of trust. Have them personally sign their full names or payroll signatures to the offer—do not sign for the Buyer or Seller. However, the Broker-ln-Charge or other responsible agent for the firm designated to hold the earnest money should sign for the firm (the same firm listed in the "Purchase Price" provision). Also be specific in identifying the listing and selling agent/firm.
10. General. Whenever possible, type the offer or at least print neatly in ink when filling in the blanks. Don't attempt to draft offers and contracts "from scratch" (this constitutes the unauthorized practice of law), and refrain from giving any legal advice to clients and customers—refer them to their own attorneys.