Negotiating the Purchase

You have found your "dream" house and you want to buy it! Now what? You make an offer by submitting a signed real estate offer to purchase with the type of financing you desire.

This offer to purchase becomes the sales contract once the seller accepts. When you and the seller sign, you are agreeing to the contract conditions. Before you sign it, read it carefully and make sure you understand every detail. Ask questions. Verbal agreements should be written into the contract.

Offers and Counter Offers

We will take the offer to the listing broker. The seller will accept it as written, or make "counter offers" on unacceptable aspects, or reject it. The selling broker will then bring us the offer to discuss with you, the home buyer, who can accept it, counter the counter offer, or reject it. The offer to buy becomes a contract when all parties have initialed every counter and signed the offer.

When you sign the offer to buy you also will have to submit a deposit to show that you are earnest about your desire to buy. The deposit is appropriately called "earnest money".

Making Sure Your Contract Is Complete

Sales contracts differ; depending on circumstances, but there are several provisions you may want to include in a contract for the purchase of real estate.

1. Deposit. The amount of "earnest money" should be clearly stated, plus the amount of money you will be paying at settlement and your sources of financing.

2. Contingency on Financing. Be specific about the total loan amount and the exact financing terms (for instance, a buy-down mortgage rate at 6 1/2% for three years and 9% thereafter for 27 years.)

3. Contingency on Inspection. You may make the contract contingent on a building inspection report. You will usually have to pay for this inspection, but the peace of mind or detection of a problem is well worth the cost of inspecting.

4. Termites. The contract should require the buyer at his or her expense, to pay for a termite inspection, the removal of the infestation if needed, and repair of any damage as necessary to be paid by the seller. You should get a written report at settlement indicating that the property is free and clear of any active termite infestation. In some areas, well and septic certificates are also required.

5. Personal Property. Light fixtures, chandeliers, washers, dryers, refrigerators, heating oil in the tank, storm windows and doors, firewood, even swimming pool chemicals and other items not physically attached should be specified in writing if they're to be conveyed to the buyer. Misunderstandings based on verbal agreements can delay settlement-as well as cause friction.

6. Repair Work. Standard contracts of sale require sellers to be responsible for plumbing, heating, mechanical, and electrical systems to be in working order at time of settlement. You should conduct a "pre-settlement walk-through inspection" which should be made several days before or no later than the day of settlement.

7. Title Attorney or Insurance Company. The buyer has the right to select a title attorney. You should shop and compare prices before deciding what attorney or title company will conduct your settlement.

8. Closing and Occupancy Date. Include an arrangement with the seller in the event you can't secure possession on the agreed date, such as a daily rent-back agreement for "post-settlement occupancy."

Charlie and I would be happy to answer any questions, please contact us!