Bob has his home for sale and has received something in writing. He is excited and believes he has his home sold if he agrees to the price.
Does he or does he not have it sold? It depends on what form he has received in writing. Too often the terms Offer and Contract are used interchangeable, as if they were one and the same while they are miles apart legally. One is enforceable by law and the other is not. One is binding on the buyer and the other is not binding.
An offer is often referred to as an LOI or Letter of Intent. Many commercial real estate sales begin with an LOI to set forth the price, terms and conditions under which a buyer is prepared to purchase the property.
For example, an LOI will state the price the buyer is willing to pay, the amount of Security Deposit he is offering, the number of days for Due Diligence (Inspection Period) and the days to close after the due diligence period. An offer is non-binding on the buyer or seller and is only designed to set forth the terms and conditions the buyer is willing to purchase the property.
The buyer will sign and send to the seller for his consideration. If the seller accepts the offer he will also sign and a Contract or Purchase Agreement will be drawn up with the price, terms and conditions set forth in the Offer.
A Contract is a legal document binding on both the buyer and seller when fully executed by both parties. A Contract will set forth in more detail and include additional terms and conditions which both buyer and seller must accept.
When an Offer (LOI) is received and even accepted there may be more negotiations on items such as closing date, environmental testing, specific performance, etc.
So, Bob may or may not have his home sold when he receives an Offer even if it is for full price.
On the local scene
The 6.5-acre tract at the corner of Well Road and I-20 has been sold to Quicktrip for a truck stop, convenience store and restaurant. The 6.5-acre tract sold for $10 psf.
MCALISTER’S DELI 198 Thomas Road, West Monroe has purchased the former OUACHITA INDEPENDENT BANK, 701 McMillan Road, West Monroe. The bank will be demolished and McAlister’s Deli will build and relocate at that site. The bank building sold for $1,060,000 or $182 psf for the 5,800 sf building.