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Contract Knowledge
Buying a home, you are entering into a legally binding contract that must be clearly understood both in terms of rights and obligations. Today's real estate contracts are quite lengthy. Agents are trained to understand and explain the contract along with the reports that are involved in a real estate transaction. Have your agent give you a sample contract to read over prior to you making your first offer. Get explanations to areas you don't understand. This will take a lot of pressure off you during the negotiation period. When it comes to contracts, put everything in writing and fill in all the blanks. Wording should be specific and carefully chosen. When it comes to who pays for what or if it ever comes to litigation, it's what is in writing that counts. Presenting the Offer When you find the right home, move on it quickly. Have your agent run "comps" on similar sales in the neighborhood. Use this information to base your initial offer. Before your agent writes up the offer, he should attempt to find the sellers motivation. Where are they moving? Why are they selling? How long has the home been on the market? Do they have an offer on another house? The agent will want to consider other aspects before writing up an intelligent offer. Is the property still for sale or are there offers pending? Is it a probate or foreclosure sale? How much do the sellers owe, are they willing to carry back a loan? Who pays for certain transfer fees may be decided by local custom. Different scenarios will dictate how a contract will be written up and presented. Be Realistic with Your Offer Negotiation time can be very emotional. If you give a lowball offer, the seller may reject it and any other offers. Your agent will present your offer with all the reasoning behind it. Your agent will be more effective if you are not present at the negotiating table. Let them do their job. They know more about the details of the offer and can present your offer in a positive light. When an agent presents an offer on your behalf, often there is another agent involved, the listing agent. If your offer is reasonable, expect 1 or 2 counter offers. You will be signing many papers during this time. Contract, counter offers, disclosures, addendums, reports and so on. Make sure to get a copy of everything you sign. You should have copies with the signatures of all those involved in the transactions. After the seller has accepted your offer, the process of escrow and closing begins. Inspections need to be ordered and scheduled in a timely manner. The loan process will begin and generate an equal amount of paperwork. This can be a very emotional and confusing time because of what is involved. The agent will follow the transaction through the closing and will walk you through the steps and keep you informed. Be patient, realistic and educated about the process. The typical real estate transaction takes 30-45 days to close after a contract is ratified. (return to top) |