Your agent will use a standard form of Purchase Agreement, developed by the Association of Realtors ® , a local Association of Realtors ® , or a private publishing company, depending on the custom in the area. You can make changes – but the seller must agree to each of the changes you make.In the United States, oral contracts are not enforceable – real estate contracts must be in writing. Even if you give me, your agent, permission to bargain on your behalf, I must have a Purchase Agreement signed by all buyers before I can present your offer.
When you read the Purchase Agreement, try to imagine yourself as an independent party who has no knowledge of the transaction other than what’s included in the contract. Is the meaning of each clause clear? For example, to avoid miscommunication list all personal property you expect to be included in the transaction. Also, it’s a good idea to stipulate the exact date and time of possession – if you’re not specific, you and your moving van could arrive and find that the seller still inside the home!
Specify in the contract that the seller is obligated to repair any damage (along with the conditions causing such damage) noted in the pest control report and the reports of other inspections.
You can specify, in your Purchase Agreement, that certain conditions must be met before the sale goes through. Contingencies are crucial, so be sure to speak up and tell me what’s important to you, so that all of your concerns are reflected in the offer. They may include:
Obviously, in a slower home sale market, sellers are more willing to accept contingencies than they are during more active circumstances. Too many contingencies in a strong real estate market may prevent your offer from being accepted. Make sure your contingencies are clear.
You will have a binding contract if the seller, upon receiving the written offer, signs an acceptance just as it stands, unconditionally. The offer becomes a firm contract as soon as the signed offer is delivered to you or me, your agent. If the offer is rejected, then the offer is no longer valid. If the seller likes everything except the sale price, or the proposed closing date, or the terms of your offer, you may receive a written counteroffer, with the changes the seller prefers. You are then free to accept or reject the counteroffer, or even to make your own counteroffer.
Each time either party makes any change in the terms, the other side is free to accept or reject it, or counter again. The document becomes a binding contract only when one party finally signs an unconditional acceptance of the other side’s proposal and that final, unchanged document is delivered to the other party or their agent.
The buyer and seller can negotiate and agree about any of the terms, conditions, costs and who pays for them. Some terms and conditions that are negotiable include:
The seller of your property is required by law to furnish you with a “Real Estate Transfer Disclosure Statement,” (TDS), in which the seller will make known to you important disclosures about that property, including any known existing conditions, any hazards or nuisances. For example, if the property drains improperly or if there are cracks in the chimney and the seller knows about it, he or she is required to let you know via the TDS.
In the TDS, the seller’s agent and the buyer’s agent are also obligated to inspect the property and to provide results regarding any known existing conditions, any hazards or nuisances. If the TDS is delivered to you after execution of the offer to purchase, you have three days if the form is delivered to you in person or five days if it is delivered to you by mail, to use it to terminate the contract if you are not satisfied with its contents.
Just as important as the TDS is the home inspection report. While the TDS documents the property’s condition, to the knowledge of the seller, a home inspection will provide you with the additional insight of a construction expert.
As a result, I advise anyone buying a home to first have it inspected by a professional home inspector who is:
Your home inspector will provide you with a written report, which will advise you of the physical condition of the property as determined from the inspection of accessible areas. Generally, the cost is approximately $300-$500.
The report also will identify areas that could not be inspected and may recommend additional inspections by other experts in areas including roofs, foundations, soils, drainage or pools. Less usual, but also recommended from time to time, are inspections for health-related risks such as radon gas, asbestos or problems with water or waste disposal systems. While additional inspections will cost more money, they definitely are worth it if they uncover an expensive defect in the property.
A general inspector will focus on the structure, construction, and mechanical systems of the house, and will make you aware only of repairs that are needed. Generally, an inspector checks (and gives estimated prices for repairs on): the electrical system, plumbing and waste disposal, the water heater, insulation and ventilation, heating and cooling systems, water source and quality, the foundation, doors, windows, ceilings, walls, floors, and roof.
Usually, there will be an inspection clause in the contract. Sometimes, the seller will provide a report of a home inspection aid for by the seller. If conditions or defects are disclosed in the report you can:
It’s not required that you attend the inspection, but it’s a good idea and I strongly recommend that you do, since generally you will learn a great deal about your property. The inspection also provides a great opportunity to hear an objective opinion on the home you would like to purchase and it is a good time to ask general, maintenance questions of an expert.
Of course, negotiating is a huge part of the homebuying process. I will negotiate on your behalf, bringing to the table years of experience and local expertise. There are some principles that are universal, though.
You’re in a strong bargaining position if:
Offers are occasionally rejected outright, but it is common for a seller to counter an offer with terms acceptable to them. But don’t let this stop you. Now you begin negotiating. I will help you.
There are many options to explore: