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blueman

writes:

On Aug 11, 9:15*pm, dpb wrote:
Oscar wrote:
"dpb" wrote in message
...

Afaict there is no contract w/ the seller at this point...he apparently
has an offer but that's no contract...

You missed the OP original statement. *"We are selling a house to a buyer
using an FHA mortgage."
FHA just doesn't go around inspecting houses, because someone is thinking
about buying this one or that one. There must be an offer & acceptance.

Obviously there's an offer; apparently OP is satisfied w/ the pricing as
he made some attempts to satisfy the conditions of an (pretty obviously
contingent) inspection but that still doesn't lead to there actually
being any contract yet in place. *There's an existing document that
could conceivably turn _INTO_ a contract, but it ain't one at this point.

Of course there is a contract in place. I've yet to see a bank/
mortgage company involved with inspections on a property without
having a purchase contract. That is the most basic requirement as
part of the whole mortgage process. They want a contract that shows
what the property is, what the purchase price is, how much is being
financed, how much is being put down, etc. together with the
application fee. Only then do they send out any appraisers/
inspectors.

And also, any buyer would be an idiot to pay a mortgage application
fee, home inspection fees, attorneys fees, etc without having a
contract. He could spend that money and then have the seller say:
"Never mind, I found another buyer at a higher price."

It's not always that simple. The process and sequence from offer to
contract varies regionally.

In MA, it typically works as follows:
1. Buyer and seller negotiate price and basic conditions resulting in
a written, signed "offer" from buyer to seller that is then signed
by the seller. Typically, a small ($1000) deposit is given by buyer
to obligate himself which is placed in escrow. Seller also is
precluded from marketing and selling property. The offer itself is
short, boilerplate, and sparse on details with only a few blanks to
add in things like "includes fridgerator and curtains".

2. Typically, the "offer" has several contingencies such as
inspection and mortgage overall. The buyer usually has about 1-2
weeks to resolve the contingencies, including getting an inspection
and obtaining a mortgage commitment. If contingencies aren't met
then, the buyer can walk. Alternatively, they can renegotiate
terms. The contingencies are usually worded to make it easy for the
buyer to walk at this stage in almost all cases. At worst, the
buyer loses his $1000 deposit.

3. A Purchase & Sale (P&S) agreement is then signed. Typically, an
additional deposit of 5-10% of purchase price is added. A lawyer is
usually brought in at this stage to review and/or edit the "boiler
plate" basic agreement. This agreement is much more detailed and
binding than the Offer and typically has few real outs unless buyer
is willing to give up his much larger deposit and potentially be
subject to suit for damages. The P&S also lays out the timing and
terms for the actual sale

4. Final sale documents are negotiated and agreed upon between buyer
and seller. Both sides are advised to have lawyers involved. The
bank is also involved when there is a mortage. The sale documents
are signed at the time of the closing.