NEGOTIATING the PURCHASE
They've found it! – Your Home is Their "Dream" Home!
They want to buy it. Now what?
They will make an offer by submitting a signed real estate "offer to purchase" This is it, this will be the sales contract if you accept it. Once the buyer and the seller sign the paper, all parties are agreeing to the contract conditions. Before you sign it, read it carefully and make sure you understand it in every detail. Ask questions. Verbal agreements should be written into the contract. Hopefully, your Listing Agent is knowledgeable and experienced in these things and can give you the assistance you need.
Offers and Counter Offers - Multiple Offers...
The Buyer's Agent will bring the offer to a "contract presentation" with the home seller and the Seller's Agent. In some areas, the three of them will discuss the offer, and the seller will either, accept it as written, or reject it, by making "counter offers" on unacceptable aspects. The Buyer's Agent will then take the offer back the home buyer, who can accept it, counter the counter offer, or reject it. The offer to purchase only becomes a contract when all parties have initialled every "counter offer" and signed the offer.
What terms will be in the Contract?
Sales contracts differ, depending on circumstances, but there are several provisions you can expect to be in a contract for the purchase of real estate.
- Deposit. The amount of an "earnest money" deposit should be clearly stated, plus the amount of money the buyer will be paying at completion and possibly, their sources of financing. A common purchase deposit in many areas is 5% of the purchase price, deposited in trust and returned to the Buyer if the sale does not go through (for example, if they are unable to obtain the financing described in the contract) or possibly forfeited if they do not buy after the subjects have been removed.
- Contingency on Financing. It will be clearly stated that their offer is "Subject to" getting financing on terms that will be acceptable to them
- Contingency on Inspection. Buyer's Agent's strongly recommend that the buyer make the contract contingent on a building inspection report, satisfactory to them. They will have to pay for this inspection themselves. Sometimes issues are discovered by the inspector that may be expensive to remedy. Re-Negotiating the Sale Price, or agreeing to have the work done prior to completion are two options. It is not uncommon for the Buyer to walk away from the transaction if the issues can't be resolved to their satisfaction.
- Personal Property. Light fixtures, drapery rods, 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.
- Repair Work. Sellers are responsible for plumbing, heating, mechanical, and electrical systems to be in working order at time of settlement, unless the buyers agree to accept the property in "as is" condition. The Buyer and their Buyer's Agent may want a "presettlement walk-through inspection" which should be made several days before the day of closing.
- Title Transfer. Title Transfer is a complex procedure that should always be negotiated by a lawyer. You should shop and compare prices before deciding what attorney will conduct your closing.
- Completion and Possession Date. The completion date is usually a couple of days before the possession date, but in some cases they may coincide or possession may be at a much later date and the seller may "rent back" the property for a period and at a rate agreed to by both the Buyer and Seller.
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Everything You Need to Know About Buying, Selling, Renovating or
Financing - Real Estate in the Fraser Valley, and Vancouver area of Canada
