Contracts
Contract Knowledge
Buying a home, you are entering into a legally binding contract that must be clearly
understood both in terms of rights and obligations. Today's real estate contracts are
quite lengthy. Agents are trained to understand and explain the contract along with the
reports that are involved in a real estate transaction. Have your agent give you a sample
contract to read over prior to you making your first offer. Get explanations to areas you
don't understand. This will take a lot of pressure off you during the negotiation period.
When it comes to contracts, put everything in writing and fill in all the blanks. Wording
should be specific and carefully chosen. When it comes to who pays for what or if it ever
comes to litigation, it's what is in writing that counts.
Presenting the Offer
When you find the right home, move on it quickly. Have your agent run "comps" on
similar sales in the neighborhood. Use this information to base your initial offer. Before
your agent writes up the offer, he should attempt to find the sellers motivation. Where
are they moving? Why are they selling? How long has the home been on the market? Do they
have an offer on another house?
The agent will want to
consider other aspects before writing up an intelligent offer. Is the property still for
sale or are there offers pending? Is it a probate or foreclosure sale? How much do the
sellers owe, are they willing to carry back a loan? Who pays for certain transfer fees may
be decided by local custom. Different scenarios will dictate how a contract will be
written up and presented.
Be Realistic with Your Offer
Negotiation time can be very emotional. If you give a lowball offer, the seller may reject
it and any other offers. Your agent will present your offer with all the reasoning behind
it. Your agent will be more effective if you are not present at the negotiating table. Let
them do their job. They know more about the details of the offer and can present your
offer in a positive light. When an agent presents an offer on your behalf, often there is
another agent involved, the listing agent. If your offer is reasonable, expect 1 or 2
counter offers. You will be signing many papers during this time. Contract, counter
offers, disclosures, addendums, reports and so on. Make sure to get a copy of everything
you sign. You should have copies with the signatures of all those involved in the
transactions.
After the seller has accepted
your offer, the process of escrow and closing begins. Inspections need to be ordered and
scheduled in a timely manner. The loan process will begin and generate an equal amount of
paperwork. This can be a very emotional and confusing time because of what is involved.
The agent will follow the transaction through the closing and will walk you through the
steps and keep you informed.
Be patient, realistic and
educated about the process. The typical real estate transaction takes 30-45 days to close
after a contract is ratified.
