Signing the Contract
If this is your first home purchase or it’s been a few years since you’ve purchased a home it is always a good idea to read through a contract, and any addendum that would be attached to the type of property that you are looking for. The best time to do this is before you’ve decided on a home. Why? Well, contracts regardless of how well they are written, tend to always protect one party more than the other and real estate purchase and sales agreements are no different. The are often worded in a confusing or illusive manner, and usually difficult to understand by those not familiar with them. So take the time to read them over carefully, before you start writing offers. Have your agent read and explain them if you’re having trouble with the legalese. Or have your attorney review the contract and counsel you on them. Being a well informed shopper is definitely in your best interest.
When you’ve found a home that you like, write an offer (contract or purchase and sales agreement). This will include the price that you are offering the seller for the property, the amount of down payment you intend to make, the type of loan that you are applying for, the amount of earnest money (good faith money) that you are putting down, and the closing date for the sale, as well as a list of what you want included in the purchase of the property (i.e. draperies, washer and dryer, refrigerator, etc.) Be aware that this is only an offer the seller can and often will counter your offer.
Your agent is there to offer advice, but you have the last word when it comes to writing up your offer. Just remember that if you really want the property, you probably don’t want to make a ridiculously low offer or ask them to leave everything in the home for you with out compensating them for their possessions – this seems to tick-off sellers and after you’ve ticked them off they don’t usually wish to enter into serious negotiations with you. Just so you know…
You also need to be aware that if it says on the Multiple Listing that (for example) the washer, dryer and riding lawn mower are included in the sale (or what ever else may be listed as coming with the property) —your agent needs to write an addendum that states that the washer, dryer and riding lawn mover are included in the sale of the property at no additional cost to the buyer. This may seem like over kill, but every now and then, these things get left out of the contract and get packed up with the rest of the sellers possessions and carted off to their new home and the buyer ends up with out what they were expecting – and without recourse to get them because they weren’t in the contract.
Counter Offers – Any change on the purchase and sales agreement, made by the seller, automatically puts the offer into a counter offer situation. Changing the price, the closing date, the title or escrow company, etc. When you receive a counter offer back from the seller it is time to re-evaluate, is the house still your dream home if it is going to cost you $10,000 more? Will you still be able to purchase it if the closing date is move up a month? Can you still purchase it if you have to go out and purchase a stove, refrigerator, washer and dryer? Regardless of what changes the seller made to the contract, you must decide if it is in your best interest to go ahead with the purchase or to back away. Going ahead, doesn’t necessarily mean accepting the terms set forth by the seller. Negotiation is the key.
Negotiation can easily make or break a sale. Remember that your agent deals in negotiation, and he or she will go about it with a cool head and without the baggage of emotions that can drag a deal down very quickly. Let your agent do his/her job. He/She is the professional and this is what you hired him for.
When negotiations are done and you’ve been rewarded with a signed around contract, don’t set back and wait for everything to fall into place. You have due diligence to preform for this contract. And time is of the essence.