Contracts can get very complicated, which is why you should seriously consider hiring a real estate attorney even if you're in a state that doesn't require one. And if you're in a state that uses boiler plate contracts that your real estate agent can customize for you, it's important to know what to look for and what your obligations are in the contract and the common points you can negotiate, including:
You can choose to offer, higher, lower, or asking price. It all depends on what you are willing to pay, can afford to pay and what you think the home is worth. Depending on the market conditions, you can take different approaches:
Your contract will have a number of key dates, including:
When you can't budge on price, you can use these deadlines to your advantage. For example, you can waive the right to an inspection objection, meaning you won't come back with a lower offer if the inspection reveals things wrong with the house. You'll either walk away, or continue with the price as offered. An expert real estate agent is often very likely to help you with these strategies.
The deadlines set in your contract are very important and can result in your losing your earnest money, so it's important to make them realistic and abide by them. If for some reason you can't hit a deadline, it's important to update the contract.
A contingency refers to a condition of the agreement of sale that needs to occur in order for the transaction to move forward. As a buyer you can include these contingencies in your contract.
Below is an list of the top contingencies:
A home warranty plans is designed to protect your home's appliances and systems from breakdowns caused by normal wear and tear. Typical items included are:
Let’s say you just move into your house and 3 months later, your stove breaks. You realize that the stove is out of the manufacturer’s warranty date. If you don’t have a home warranty, it might cost you hundreds of dollars to replace or fix.
You can make home warranties a part of your negotiation with the seller where appropriate, again your real estate agent might be able to help you with these strategies.
Escrow is a 3rd party in a major financial transaction between the buyer and the sellers that holds a valuable asset until the transaction is complete. Often speaking, an escrow account is required for any home purchase to occur.
Most contracts will require the buyer to put a percentage of the purchase price in escrow called earnest money, while they complete their due diligence. The earnest money shows your seriousness as a buyer and proceed with the due diligence process.
It is common for the seller's real estate agent to hold the buyer's money in escrow, but this is something that you can negotiate.