The Home Buying Process
Step 7: Completing a Real Estate Purchase Contract
In order to make an offer on the home that you wish to purchase, you and your agent will complete a REPC. The REPC is a prewritten contract approved by the Division of Real Estate of the State of Utah that contains three separate elements: the earnest money receipt, the offer to purchase, and the document receipt. Inside the REPC are key dates, dollar amounts, and terms that you will be able to decide in an offer.
Some of the items that you and your agent will need to decide are:
- Purchase Price - Your offer could be higher, lower, or equal to the asking price. In order to know what the best purchase price to offer is to investigate houses that are currently active, recently sold, recently expired or withdrawn, or longstanding homes on the market. Homes that have been up for sale for a long time in an active market could mean that either the house may be either overpriced or have serious problems. It is during this process your real estate agent will be of enormous value.
- Earnest Money Deposit - The deposit that you make as a buyer when submitting an offer to purchase real property. It shows your intent, or earnest, in buying the property. Usually, the earnest money is 3-5% of the purchase price and is only cashed if your offer is accepted. If your offer is accepted, the earnest money is applied to your down payment or closing costs at settlement. If your offer is not accepted, your check will be returned to you. In the event that you default on the REPC, the earnest money will serve as liquidated damages to the seller.
- Important Dates - While filling in the REPC you will need to determine four key dates that will determine when you will close on the home, when you will complete all necessary inspections, when you will complete your loan application, and when the seller will provide you with the Seller Disclosure Documents.
- Contingencies - Ask your agent how pending financing, your current home’s sale, and any other contingencies might be included in the REPC when completing it.
