Price isn’t the only thing to consider when negotiating a real estate purchase and sale contract.
For example, terms – in terms of types of financing terms that are available, you can use a cash contract, meaning that the buyer has no contingencies, they’re paying cash for the property or there might be some financing options such as Conventional, FHA or VA financing or some other type of financing. And when there’s financing involved, it can create new levels of contingencies or factors that need to happen in order for the buyer to be able to complete the negotiation and sale of the property. So, that could impact the transaction actually goes, right? So, you know, when you’re considering a cash transaction, that’s a smoother deal. When there’s financing involved, there can be hurdles such as another contingency that should be negotiated the appraisal.
What happens if the property doesn’t appraise for the purchase price and how will that be negotiated? So, that’s another contingency factor, appraisal.
Another factor contingency is whether or not the property is being sold as is or if you are as a seller, warranting the sale of the property. And that’s an important condition to focus on because it could put a seller in an obligation to make repairs to the property if they’re not in an as is purchase and sale contract, that brings me to another very important factor to negotiate is inspection period.
How long will the buyer have to inspect the property? And what are the factors that they are going to be able to do during those inspections? For example, will they be doing a lead-based paint inspection? Will they be doing an inspection for termites? Will they be doing a roof or plumbing and electrical inspection? And how long will they have? And if they make damages to the property, who will make those repairs to the property during the inspection period? So those are all factors to consider.
The closing date – closing date is a very important factor.
When will the closing take place and when it closes, will the seller be obligated to be out of the property at the day of closing or will the seller be allowed to stay past the inspection period? So, these are all factors.
The occupancy of the property in the negotiation process is another factor to negotiate. So, as you can see, price isn’t the only factor and negotiating any one of these points can make the negotiation process on price change.
And one more point to consider is occupancy. Will the possession of the property be turned over? Is the property tenant occupied or will the owner be staying over for an extended period of time past the closing, all are important factors in negotiation.
The bottom line is, negotiations are complicated. It’s advisable to have a real estate attorney and or a real estate broker involved in your transaction.