04 Mar Apprise Yourself of These Real Estate Negotiation Surprises
It would be wonderful if buying a new home were as easy as purchasing a new TV, but the transaction is complicated by nature. It’s good to be apprised of common real estate negotiations and surprises that can surface during the process.
Contingencies: You can almost bet that there will be contingencies, like those associated with inspections, loan approval, appraisals, etc. Some contingencies give sellers the right to remedy the problem, while others allow the buyers to withdraw from the contract for any reason at the end of the inspection contingency period. Contingency questions should be directed to your real estate agent or you can always consult a real estate attorney.
Written Vs Verbal: A real estate transaction is a big deal, so this isn’t the place for a verbal agreement or handshake. Make sure you get everything in writing when it comes to the purchase or sale of a property. This is especially true for anything before the purchase contract is signed. After you have signed it, the document is considered “ratified” and it becomes binding on behalf of both parties. Generally speaking, a signed purchase contract cannot be changed at this point unless both sides agree to it.
Renegotiation: Sometimes, things will change during the course of a real estate transaction, and as such, renegotiation can happen. While the ratified purchase agreement is a legally-binding document for both the buyer and seller, you should definitely be prepared to go back to the bargaining table if need-be.
Appraisal Required By Lender: If you’re buying, your lender may require an appraisal of the property before they will release your money. Be prepared because sometimes this appraisal can come back lower than the purchase contract price, and that means they can change your loan amount and lend you less than what they originally agreed to. At this point, a buyer might ask for another appraisal, withdraw from the contract, or try to renegotiate a price with the sellers.