Colorado Springs Real Estate Contracts Guide – Contract Negotiations
Both parties have to agree upon all terms of how the property is going to be transferred. This is all identified during contract negotiations. It is important to go through this process with Realtors in the middle. Why? Because a professional Realtor will keep your motivations confidential. If a Buyer or Seller interfaces with the other Realtor, anything you say can and will be used against you in negotiations. (Unless the Realtor is a Transaction Broker*)
Parties Must Agree to the Following:
- What is the price of the home?
- What is included with the home? Washer, dryer, refrigerator, curtains, swing sets, hot tubs, etc.. are common negotiation items.
- Does the buyer have a home to sell before they can buy?
- How long does the seller have to get documentation (covenants, title commitment, disclosures, etc..) to the buyer and how long does the buyer have to review it?
- How long does the buyer have to review the condition of the home and how long do both parties have to come to agreement on what/if anything will be fixed?
- How long does the buyer have to make sure the property is insurable?
- If a survey is required, who pays for it and when is it due?
- When is the appraisal due, who pays for it?
- How long does the buyer have to review their loan?
- When is the property going to change hands and possession?
Parties Must Be Reasonable
As you can see, there is a lot to cover in the contract! Sellers need to give buyers reasonable amounts of time to get their discovery done and buyers need to be sensitive to the fact that while they are doing their discovery, the seller is losing days on market so they need to get things done quickly to be sure they want to move forward.
Colorado Springs Real Estate Seller:
First and foremost, make sure your agent asks for a pre-approval letter. You want credit checked and assets verified before you accept their contract. You want to make sure they are well qualified so you don’t lose a month or more of on market time.
If they have a home to sell, have your agent run a market assessment on the home and review the home in person. If that home doesn’t sell, your buyer doesn’t buy.
Remember that each item above allows the buyer walk away and get their earnest money back. You want these dates as short as possible so that you:
- Limit lost days on market
- Can move out with a relatively safe understanding that closing is actually going to occur and if it doesn’t, you will at least retain the earnest money as damages.
Colorado Springs Real Estate Buyer:
Read my note to Sellers. Have a pre-approval letter before you write your offer. Your offer will carry more weight the more serious you can prove you are. The longer you have for discovery, the safer your earnest money is.
I often see pricing based on nothing more than a sellers wish instead of factual data. Be sure your Realtor runs a value assessment on the property for you. If comparable sales do not support the asking price, be sure your Realtor includes that information with your offer so the seller can see your offer is based on data, and not mean spirited. (you have a better chance of getting closer to your asking price) “Lowball” offers are not a productive use of anyone’s time and only creates friction which will make it harder for parties to come to agreement.
If you have a specific question not covered on this site, please contact me.
*A transaction broker is a Realtor that is representing both parties in the same transaction and typically occurs when a buyer who does not have a Realtor calls a listing agent directly and wants to purchase a home. In these circumstances the Realtor CANNOT discuss other parties motivations and also cannot make suggestions on pricing and terms. They MUST remain neutral and their only job is to fill out forms and advise of obligations because of the forms.