Helpful Information
> Contract Negotiation: Terms and Conditions
Contract Negotiation: Terms and Conditions
If the terms and conditions of the deal aren't acceptable,
you might want to pause and think twice.
By Marcie Geffner
 There's
a lot to consider before you sign a real estate purchase agreement.
If the terms and conditions of the deal aren't acceptable,
you might want to pause and think twice, even if the purchase
price is more than satisfactory. After all, the price will
be moot if the transaction never closes.
The typical residential real estate purchase
contract is complicated, densely written and packed with legal
jargon, but don't use that fact as an excuse for not reading
the entire contract. Take your time and read slowly. Ask questions
about anything you don't understand. Be flexible and willing
to negotiate. The following five points are among the many
items that merit attention:
1. What are the cutoff dates for
inspections and approvals of the inspection reports? A
typical contract provides an opportunity for the buyer to
hire all manner of experts to check out the condition of the
home. From the buyer's perspective, the more time that's allowed
for these once-overs, the better. Sellers, on the other hand,
usually want the inspections to be completed and signed off
as soon as possible.
2. Who is responsible for
making repairs, if any, as a result of the inspections? The
fact that the buyer orders one of more inspections of the
home for informational purposes doesn't obligate the seller
to make repairs or modifications as a result of those inspections.
In practice, however, inspection reports often are used to
negotiate repairs of major problems or safety or environmental
hazards that may be noted. The purchase contract should provide
some guidance for these negotiations.
3. Is the seller making any representations
or warranties regarding the condition of the property? In
some contracts, the seller warrants that specified major components
of the home (e.g., the roof or central heating or cooling
system) are in good repair and working order at the close
of escrow. Buyers should understand which components of the
home are guaranteed and which are being sold "as-is."
4. Will a home warranty plan be
purchased? A home warranty plan is a sort of limited
insurance policy covering the basic major systems and appliances
in the home. It may seem like a prize for the buyers, but
it's equally important for the sellers and the real estate
broker representing the sellers. In fact, these warranty plans
are so popular among real estate agents that many of them
will pick up the tab for the program in order to insulate
themselves from irate buyers.
5. When is escrow scheduled to close?
Pay attention to this date! If you're selling your
home, you'll be expected to move out completely before the
property changes hands. You'll want to make sure the closing
date doesn't fall before you're able to move into your next
residence. If you're buying a home, you'll be able to pick
up the keys on the day escrow closes. You'll want to make
sure you don't give up your prior residence too soon. Don't
cut the dates too close. Many escrows end up closing a day
or two later than the contract states--but that can happen
only with the mutual agreement of the buyer and seller.
Copyright © 2000 Marcie Geffner.
All rights reserved.
|
