What is the difference between a Contract and an Offer?

By Michelle Shelton

Real Estate Agent with Realty One Group SA551856000

February 11, 2007 07:33 PM

What is the difference between a Contract and an Offer? By Michelle Shelton
	Often Real Estate Agents misuse the word "contract". The Residential Purchase Contract used in the buying / selling of real property in Arizona, is simply an "offer" when the buyer's agent fills it out and submits it to the listing (sellers) agent. It does not become a fully executed contract until there is a meeting of the minds of all parties involved in the buying and selling process. Once this happens both buyer(s) and seller(s) initial and sign the offer and it becomes a "contract". I think the confusion stems from the name of the document. It is called "Residential Purchase Contract". Personally, I would call it an "Offer to Purchase Real Property / Residential Purchase Contract", because it really is both. Hopefully this will resolve any confusion or tension about signing an offer. Yes, you are extending an offer to purchase but you can back out any time before that offer is accepted and you are not obligated to do anything until you have received a copy of the fully executed contract. To familiarize yourself with this important form view a sample here.