Wednesday, June 21, 2006
Real Estate Purchase Contract Tips
When purchasing property there are many considerations regarding the contract that can be modified in your favor. But remember, a deal is not a deal unless both parties benefit.
1. Closing Date: You may be able to adjust this date based on your financing or sale of existing property issues. For pre-construction the builder may not be flexible.
2. Financing: Often you can pay points to "buy down" the interest rate.
3, Property Modifications: Make sure you understand the deadlines regarding choosing paint color, carpet, tile, etc.
4. Access to Property Before Closing: This is rare, but I have done it. Remember if you are selling and allow the prospective owner to move in before closing and something happens where you do not close, it can be very difficult to remove the prospective owner.
5. Fees: If the property has an association, know exactly when the fees start.
6. Assignability: If you are an investor, it is beneficial to be able to assign the property to another entity or individual, especially during rapid price inflation, however, this is becoming more rare now.
7. Title: Know who's name or LLC will be on the title. It is best to have it correct on the offer contract because it may be difficult to change later.
8. Conditions: Be aggressive in stating your wishes in the contract. If the seller agrees to shampoo the carpet before closing, state it in the contract and do a walk through before closing. Other clauses to use: This contract is conditional on buyers acceptance of the inspection results. This contract is conditional on buyer being able to acquire insurance.
9. Price: For new construction the builder may not want to sell a property for less than he did to the first buyer in a project, however, you can still negotiate credit back at closing or additional upgrades.
1. Closing Date: You may be able to adjust this date based on your financing or sale of existing property issues. For pre-construction the builder may not be flexible.
2. Financing: Often you can pay points to "buy down" the interest rate.
3, Property Modifications: Make sure you understand the deadlines regarding choosing paint color, carpet, tile, etc.
4. Access to Property Before Closing: This is rare, but I have done it. Remember if you are selling and allow the prospective owner to move in before closing and something happens where you do not close, it can be very difficult to remove the prospective owner.
5. Fees: If the property has an association, know exactly when the fees start.
6. Assignability: If you are an investor, it is beneficial to be able to assign the property to another entity or individual, especially during rapid price inflation, however, this is becoming more rare now.
7. Title: Know who's name or LLC will be on the title. It is best to have it correct on the offer contract because it may be difficult to change later.
8. Conditions: Be aggressive in stating your wishes in the contract. If the seller agrees to shampoo the carpet before closing, state it in the contract and do a walk through before closing. Other clauses to use: This contract is conditional on buyers acceptance of the inspection results. This contract is conditional on buyer being able to acquire insurance.
9. Price: For new construction the builder may not want to sell a property for less than he did to the first buyer in a project, however, you can still negotiate credit back at closing or additional upgrades.
