What are terms and conditions of a real estate sale, and why are they important to know? When a listing “closes” in the Emerald Coast Association of Realtors MLS in Florida, a field is required where an agent enters “sales notes”. The requirement is as follows:
“Listings changed to a Closed status must include any applicable information regarding factors affecting the sales price in the Sales Notes section.”
It is important to know what terms or conditions affected a sale to help other real estate agents price new listings correctly, or to make adjustments to existing listings either with price or incentives. This information is also extremely important to real estate appraisers who are hired by lending institutions or individuals buying homes.
What are some terms and conditions that affect a sale price?
Some examples are:
- Seller paying buyer closing costs (like a credit to cover a percentage or dollar amount of buyer’s title insurance, loan expenses, points, lender charges, a property survey, inspections, etc.)
- Buyer paying seller closing costs (like real estate commission, doc stamps on the deed)
- Seller “crediting” the buyer for repairs (the credit could be a dollar amount applied towards buyer’s closing costs or pre-paying a contractor for the cost of the job)
- Agents waiving commission if it’s their own purchase or sale
- Buyer allowing a seller to remain in the property after closing, either with or without rent
- Property appraising under contract price. Was price adjusted downward or did buyer complete the purchase notwithstanding?
- Seller including furnishings that buyer wants
- Seller doing repairs for a buyer prior to closing (that may have been noted in a home inspection or termite inspection)
- Seller doing upgrades for a buyer prior to closing (like painting a house, putting on a roof, installing a new water heater – some of these are Florida specific items due to Florida insurance issues)
- Buyer allowing seller to use the property (if it’s a rental) at a future date, or dates, free of charge, or for reduced rate, as an incentive to accept a lower sales price
- Multiple offers which created bid atmosphere and pushed up pricing
- Buyer paying for upgrades which increased sales price (new construction add-ons or customization).
- Seller paying homeowners association or condo association special assessment in full or part, and for how much
- Buying agreeing to pay special assessments
- Seller including boat, car, golf cart, bikes, etc.
- Buyer waiving home inspection or other inspections
- Buyer using Florida escalation clause
- Property selling “as is”, if major repairs were needed, that should be noted
- Buyer paying cash
- Buyer closing faster than normal
- Seller financing
If I were doing a market analysis for a new Destin Florida listing, how would some of these sales terms affect my pricing suggestion? If similar properties sold for a certain amount, but they were sold furnished, and my seller did not want to sell furnished, that may reduce his sales price. If a seller of a similar property were allowed a month extra to stay in the house, but my seller wasn’t asking for a free rent back, then his price may be higher. If a similar property sold without a home inspection, then that’s a buyer contribution to price, so my listing might sell for more. If a similar property sale included a golf cart and boat, but my listing does not, it may sell for less. Is this making sense?
Of course, there are many other pricing factors, but sales terms and conditions are critical to analyze the current market for the property.
It is our duty to the public to use our best skills and abilities to recommend a correct listing price to our sellers. Noting sales factors is imperative.
It’s Wendy… It’s Sold!
Wendy Rulnick, Broker, Rulnick Realty, Inc.
Email Wendy: firstname.lastname@example.org
Wendy Rulnick, Broker, lists and sells real estate in Destin, Santa Rosa Beach, 30A, Miramar Beach, Crestview, Sandestin, Seaside, Rosemary Beach, Okaloosa Island, Fort Walton Beach, Niceville, Freeport, Bluewater Bay, Navarre, Florida.