Once you have your eye on a particular piece of property, you will probably have many questions about what lies ahead, between making an offer and closing day. As excited as you may be to get into your new home, purchasing real estate, no matter the cost, is not something you will want to do hastily or without careful consideration of the terms of the documents you will be signing.
You may feel rushed, although perhaps unintentionally, by others involved in the process, especially when it comes to signing the purchase agreement. The purchase agreement is a legally binding contract that contains your offer as well as other important terms about the sale. What you may not know is that some of the terms of that purchase contract are negotiable, and you would be wise to make sure they benefit you before you put your signature on the paper.
Give and take at the negotiation table
Each state has its own laws governing real estate transactions and contracts. However, in many cases, when making your formal offer, you can specify certain conditions under which the transaction will take place. Not meeting any of these conditions may give you the right to break the contract and walk away from the sale. Some common contingencies buyers want in their purchase agreements include the following:
- A positive home inspection or the right to walk away or re-negotiate the price of the home if the inspection reveals serious flaws
- Seller assistance with closing costs, or paying all the costs, usually in exchange for paying extra for the home
- Closing contingent on you obtaining financing with a certain interest rate or a special kind of financing, such as a VA loan
- The conveyance of certain furnishings, fixtures, appliances or other items in the home or on the property
- A closing date that is different from the typical 30 to 60 days
- Closing under the condition that you are able to sell your existing home
The sellers of the property probably will also have conditions and contingencies to add to the contract. For example, they may base the sale of the property on whether they are able to close on a new home. The sellers may also want a speedy closing, such as if they are moving out of state. Seller and buyer contingencies can be a delicate balancing act, which is why it is important to give careful thought to your purchase agreement before signing.