Individuals planning real estate transactions may need help setting terms that properly protect them. Frequently, the main consideration buyers focus on when preparing an offer is the price for the property.
They want to offer a competitive amount that they can reasonably afford based on personal assets and financing. Price is an important consideration. Personal protection is also critical. Those making offers to purchase real estate have a lot to lose.
They have earnest money to protect, and they may need to add terms to the contract that limit the likelihood of litigation or feeling forced to complete an unfavorable transaction. The three terms listed below are important to address in an initial offer and when negotiating a purchase agreement.
Protective contingencies
Typically, there are certain circumstances that might reduce a buyer’s desire to complete a real estate transaction. A low appraisal that prevents them from securing a mortgage is one such situation. Unexpected property issues showing up during inspection can also derail a closing. Contingencies protect the earnest money buyers have deposited by allowing them to cancel a transaction in certain circumstances.
Occupancy dates
Buyers are usually eager to take possession of a home as quickly as possible. However, sellers may face challenges as they attempt to move out of the property. In some cases, sellers may stay for days or even weeks after the closing. If the proposed date for the change in occupancy is after the closing, the buyers may need to arrange for certain protections in the purchase agreement. They may need to impose a hard date by which the seller must vacate the premises and a daily rate that they have to pay if they stay in the home after closing. Buyers who allow post-closing occupancy expose themselves to several forms of risk and financial liability.
Special requests
Generally speaking, there is an expectation that fixtures and landscaping plants remain with the property, while personal items leave with the seller. In some cases, buyers may have special requests regarding certain furniture or other items that they noticed during their tour of the property. Clarifying a desire to retain certain resources can help ensure that buyers are happy about the transaction after they take possession of the property. Asking a seller to remove items that might typically stay with the home can also be important if the buyer doesn’t want to remove and dispose of those items.
Partnering with someone familiar with contracts and real estate law can take much of the risk out of a home purchase. Integrating the right details into an offer can help limit a buyer’s risk when purchasing real property.