If I could give any new buyer advice, it would be: educate yourself on the process of how real estate is conducted in the area you're buying in. Knowledge is power. Nobody likes surprises in a real estate transaction.
The process of purchasing a home in our corner of Southern New York State vastly differs from what you may be familiar with if you’ve bought and sold in other parts of the country. It can be a frustrating experience if you aren’t educated beforehand on what to expect.
Let’s say you’ve found your dream home in Westchester County and you want to put in an offer.
The first step is to verbally negotiate through your agent. The items to be negotiated are: the price you’re willing to pay, the closing and occupancy dates, any contingencies such as a mortgage contingency, and any personal property to be included/excluded. An earnest money deposit is not common in this area, nor is a fill-in-the-blank contract of sale.
Once you and the seller agree to the terms of the sale, you would apply for your financing and arrange for any inspections such as engineering and pest inspections. Then the seller's attorney draws up the contract of sale based on the agreed upon terms.
This is the time period in which you may feel a pit in your stomach. You really only have a verbal agreement. It's what we call an "acceptable offer". The possibility still exists that someone may make an offer more acceptable to the seller based on price, terms, etc. The seller always has the option to entertain any other offers and the listing agent, by law, is required to present all offers to the seller.
Only a signed contract between you and the seller obligates you to one another. And that signed contract needs to be delivered back to you to take that worry off your shoulders.
Once the contract is sent to your attorney, you have the opportunity to review it before signing. After you sign, it is returned to the seller’s attorney so the seller can sign. Along with the signed contract, you submit a check for 10% (typically) of the purchase price and that’s held in escrow by the seller’s attorney.
Your closing will take place at an agreed upon time by the attorney’s and possession generally takes place after the closing.
The process is really only frustrating to those that have lost out on their dream home because the seller accepted another buyer's offer after accepting their offer first. It doesn’t seem fair but it does happen occassionally, and it is legal.