It might seem that once a purchase and sale agreement has been signed that the selling process is complete. Not only is it not over yet, but some of the most complex aspects of a real estate transaction now begin. A series of inspections and checks are typically required to satisfy buyers and lenders. Peachtree Fine Properties will help you complete the transaction process by assisting with the many requirements found in a typical purchase and sale agreement. We also help you prepare for closing, that is, finalizing the sale.
What’s in a Purchase and Sale Agreement?
A purchase and sale agreement sets a purchase price for the home and a series of terms and conditions. For instance:
• Contracts routinely depend on the ability of a buyer to obtain financing and/or sell their current home, which is why most sellers prefer buyers with mortgage preapproval letters.
• Due diligence period.
• Lenders will establish numerous conditions before granting a loan. They will want a title exam, title insurance to protect against title errors, termite inspection, possibly a survey and an appraisal to assure that the home has sufficient value to secure the loan.
Selling your home involves both business and personal issues: you will have people looking at your home; buyers presenting offers and counteroffers; and bargaining, negotiating and signing documents. Peachtree Fine Properties will assist you in the offer, counteroffer and negotiation process, offering advice and counsel as offers are received and by working closely with legal counsel, lenders and inspectors as required.
What is an Offer?
When you put your home on the market, you are making an offer to buyers to acquire your home: for a set dollar amount and other terms. Home buyers, in turn, can respond with several options:
• accept the offer
• decline the offer
• make a counteroffer
Typically, the buyer’s agent will present a written offer to the seller through the seller’s agent. The seller, in turn, may accept the offer, decline it or make a counteroffer.
What is a Counteroffer?
A counteroffer is a new offer with different terms. Offers and counteroffers reflect the back-and-forth activity of negotiating a contract. It’s a common, efficient and practical process – but also one that may contain tricky clauses and hidden costs. Because of this, and because counteroffers are common, it’s important for sellers to remain in close contact with Peachtree Fine Properties during the negotiation process so that any proposed changes can be quickly reviewed.
What is an Acceptable Offer?
The goal of every seller is to have a stream of potential buyers, each bringing higher and higher offers. And while this has been known to happen, in most markets there is some balance between the number of buyers and sellers. To determine whether a buyer’s offer is acceptable, the seller should consider the following questions:
• Has the buyer accepted the asking price or something close?
• Has the buyer buried thousands of dollars in discounts and seller paid closing costs within tiny clauses and contract additions?
• Is there a possible better deal than the buyer’s offer? If a home has not attracted an offer in months, then the seller needs to recognize that each month’s costs are being incurred for mortgage payments, taxes and insurance.
• Do you have enough time to wait for other offers?
• What if no other offers are received?
• What if several offers are received? Do you choose the higher offer from the purchaser with questionable finances who may not be able to close, or a lesser offer from a buyer with preapproved financing?
• What are the contingencies and what time period do they last for if other offers are received?
In each case, the owner with assistance from Peachtree Fine Properties will carefully review offers, consider marketplace options and then determine whether an offer is acceptable.
Contingencies and “Subject to” Clauses
Offers from buyer often contain contingencies or “subject to” clauses that must be met before the contract can close.
Contingencies can include the following:
• approved financing
• buyer selling an existing home
• satisfactory home inspection report
• test results for environmental factors including radon, mold and water quality
• termite inspections
Peachtree Fine Properties will make sure that any buyer contingencies have a time clause.
How Do You Negotiate?
No aspect of the home buying process is more complex, personal or variable than bargaining between buyers and sellers. Peachtree Fine Properties brings value to the negotiation process because we know the community, have participated in numerous homes for sale, know local values and have experience negotiating real estate transactions. We can also help you avoid getting locked into a deal that’s likely to fall through because of the prospective buyer’s finances.
Real estate bargaining typically involves compromises by both sides. It’s not war; it’s not winner-take-all. Instead, negotiating should be seen as a natural business process: buyers should be treated with respect, and owners should never lose sight of either their best interests or their baseline transaction requirements. There are a lot of considerations, not just price, in making and negotiating offers. Peachtree Fine Properties can guide you in a win-win negotiation.