11 Mar Common Real Estate Negotiations That Catch People Off Guard
Whether you’re the buyer or the seller, real estate transactions are complicated. It’s quite common for a purchase agreement to be rejected the first time around, meaning both parties head back to the bargaining table to try and reach common ground. Whether you’re a seasoned real estate veteran or you’re navigating the process for the first time, here are some of the most common real estate negotiations that catch people off guard all too frequently.
Contingencies: These can be associated with things like loan approval, inspections, appraisals, and more. Worth noting is that some contingencies allow the seller to fix the issue, while others give buyers the ability to withdraw from the contract at the end of the contingency period. If you have questions about contingencies, your real estate agent can assist you, or you can discuss them with a real estate attorney.
Written Vs Verbal: Since real estate transactions are such robust transactions, you should get everything in writing when it comes to buying or selling a home, especially before the purchase contract is signed. Once signed, the document is considered “ratified,” meaning it is a legally binding contract between both parties. Usually, once the purchase contract has been signed, it cannot be changed unless both sides agree.
Renegotiation: Real estate transactions set off in one direction, but sometimes, they change course as they unfold. This prompts both parties back to the bargaining table, and renegotiation begins. Just because you have a ratified purchase agreement, be prepared to go back to the bargaining table.
Lender-Required Appraisal: It’s not uncommon for a lender to require an appraisal before they will release money. Sometimes, this appraisal will come back with a lower number than the purchase contract price, meaning the lender can change the loan amount. If this happens, a buyer might request another appraisal, withdraw from the contract, or renegotiate the price with the sellers to bring it within the updated loan amount.