Sometimes the terms are just as important as the sale price.
When buying real estate we all focus on the sales price in the purchase and sale contract. While the sales price is undeniably important, the fact is that other terms in the sales contract may be just as important.
Closing Costs
Some buyers and sellers will haggle over a few thousand dollars in the sales price without paying attention to the closing costs. Closing costs for a buyer may range between two to five percent of the sales price. If a seller assumes some or most of the closing costs, and this can result in considerable savings the buyer. Likewise, when a contract is negotiated in the interest of the seller, the seller may save thousands of dollars at closing if the contract states that the buyer is responsible for these costs.
The Property Inspection
Many home buyers will get a property inspection to determine if there are hidden issues with the property structure, foundation, roof, air quality. Some inspections reveal that a home is in fairly good condition, but others may reveal that a property needs thousands or even tens of thousands of dollars worth of repairs. The buyer may back out of a contract within a certain period of time after receiving the property inspection report or so that the terms of the sales contract may be re-negotiated. One of the best things that a seller can do is to get an insepction ahead of time and fix the issues. This way there are no surprises and a home in good repair will be more attractive to a buyer.
The Appraised Value
In an ideal world, a home would appraise for the contracted sales price, but this is not always the case. A sales contract may be written with terms that allow for the sales price to be renegotiated after the appraised value is confirmed. If the buyer is seeking a loan most banks will not allow the sale to go through and most buyers will not pay more than a house is worth.
Special Contingencies
Contingencies may make a particular offer a little less attractive to a seller. For instance if a buyer has to sell a home before buying the property it could mean longer escrow periods or the sale not going through. Always take into consideration any special contingencies in a contract.
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