Contract Negotiations

This is a BIG area in any real estate transaction.

It's Your Responsibility
Be sure to do your job.

There is a lot involved in a real estate transaction. You need to be as pleased with the terms of your contract as you are with the price of the home. Don't let legal jargon and lengthy text prevent you from reading each and every paragraph and clause. It may not be as exciting as the latest bestseller, but it will have more action and impact on your immediate life.

Everything Is Negotiable...
And we mean everything!

Everything in a real estate deal is negotiable. That is the beauty of it. You can look at a property and offer less than the list price and often get the house-just try that at your local supermarket! You can even ask to take all the curtains and furniture if you want. You may not get it, but then again, you might. One real estate deal even included a cat that lived in the house. The buyer agreed to take the house on the contingency that the cat stayed. The seller said, "okay" and the deal closed.

Now that doesn't mean that buying a house is the best way to get a cat, but you can negotiate for more than you thought. The key is to start your negotiations with the contract, not after. If you don't include it in the contract before both parties sign, forget it. You can ask, but you aren't likely to get anything extra you may want.

Helpful Hints...

Here are some points to take to heart when reading your contract over:

• What are the estimated transaction costs? Who is going to pay for what in the closing? These are the important details that need to be spelled out before you reach the settlement table. These can include all sorts of costs:
  
  
  1. Termite inspection
     
     
  2. Title search
     
     
  3. Attorney's fees (for the settlement)
     
     
  4. An owner's title insurance policy
     
     
  5. Transfer taxes
     
     
  6. Recording fees
     
     
• Contingency clauses. Be sure these are definite and leave no room for interpretation.
  
  
• Look at the cutoff dates for inspections. If these dates pass without the requested inspections taking place, you lose the right to have them. The more time you have the better. Of course, the seller thinks just the opposite. The less time they give you is better for them.
  
  
• Just because you insist on inspections, doesn't mean the seller has to do anything with the information. You must put a clause in your contract (and offer) to either hold the seller accountable or, at the least, a process by which negotiations on those repair costs can be entered into the contract after the inspection. Your attorney can help guide you on the language for this preventative step.
  
  
• There should always be an "as-is" statement in the contract. This states that the seller warrants that the major components of the house are in good repair and working order at the time of escrow. Be sure to have the items included in this "good repair and working order" warranty listed to eliminate any confusion.
  
  
• Be sure to include notations about any home warranties. If the warranties are not listed in the contract, they may not apply to the new owner (that means you as the buyer won't be covered). A home warranty is a limited sort of insurance policy that covers the new homeowner for up to one year on the home. Some brokers insist on purchasing these policies to protect themselves from displeased new buyers.
  
  
• Does the carpet or flooring need replacing? You may be able to get the seller to swing the replacement. The same goes for a new paint job.

Other Things to Keep in Mind
Things we've learned...

The longer the home has been on the market, the more you are likely to be able to bargain for.Talk to your buyer broker or attorney to work the best deal for you.

Talk to your attorney about what is and is not included in the contract while you are at it. You need to be absolutely certain and comfortable about the entire contract before signing it. The only items that can be addressed at the table are those that are allowed within the context of the contract itself. Be sure to set the parameters carefully so you have legal recourse should something go wrong in the process.

Keep Going for a Handy Contract Checklist

It will help you make sure you haven't left anything out.

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