AGREEMENT OF PURCHASE AND SALE
NEGOTIATE LIKE A MASTER
Buyers don’t want to overpay or price themselves out of a resale in the future, while sellers want to make sure the deal makes sense for their financial plan. Price is one of the most important aspects of a deal happening, but a lower price with better terms could be just as appealing if not more.
Buyers have to pay prepaid closing costs for their mortgage, which is money that the mortgage lender holds in escrow, for items like taxes and insurance. A buyer may ask a seller to pay a flat dollar amount toward their closing costs, or up to a percentage for what’s an allowable contribution for a lender. If [a buyer] asks the seller to make a concession on [his or her] behalf, they’re likely going to have to pay a higher asking price.
Closing Date/Possession Date
Sellers can negotiate for speed when they need to get their capital out of the home fast; and closing dates will affect buyers' monthly cash flow once they own the home. Keep in mind, when a buyer closes on the house, they skip the next month’s mortgage payment. Maybe they want to close at the beginning of a month so they skip the next month.
A deposit becomes part of your the buyers offer as a sign of good faith. Agreement of Purchase and Sale Contract stats you have 24 hours upon acceptance for the buyer to provide the deposit, usually in the form of a certified cheque at least 5% of the purchase price. The sellers brokerage will hold the funds in their trust account until closing date.
Finance Condition is common to see in an offer usually buyers request 7-10days time needed to fulfil this step in the buying process. Now, some Buyers competing with all cash offers need to figure out if they can drop the financing contingency, which will shorten their closing time line. Buyers can do this by having their mortgage fully approved prior to making an offer. That pre-approval shows that their finances are in order and they can afford the property.
A buyer can request for a home warranty, or a seller can offer one. This protection plan covers the home’s appliances and systems, like the air-conditioning and hot water heater, in the event these things break or need repair.
The process of moving into a new home can be highly stressful and labour intensive. “If a seller needs a little extra time to get into their new home, [buyers can] offer a zero-cost rent-back for 30 to 90 days to entice the seller to accept the offer over others. Peace of mind is a valuable negotiating tactic.
Buyers also have a ton of room to negotiate when a home needs a lot of updating. When a home is out-of-date with appliances that don’t work, popcorn ceilings or cracked pool foundations, for example, a buyer can ask for a lower price because of the cost to bring the home back to today’s standards. Sellers can also specify that their house is being sold “as is where is” and that they won’t make any repairs.
If the buyer’s getting a mortgage, [the seller] could push for the buyer to waive the appraisal contingency. But then they have to make good on the amount of cash to close, If for some reason the appraisal falls short and the bank will lend them [only] so much money based on an appraised value.
These are items that are affixed to the wall/ceiling that should be included with purchase. These are usually items that have been screwed in i.e. chandelier, light switch covers etc.. Sellers will need to clear what fixtures are not included so no confusion occurs when buyers take possession.
Are the items that are easily removed and will be taken from the home by the seller - pictures on the wall, furniture, etc. Buyers might want to negotiate some of these items or as the seller you might want to include in the sale.
The stove, dishwasher, microwave and any built-in appliances may come with the property known as Fixtures, but not the washer, dryer and refrigerator they are known as Chattels. In different markets, people don’t always convey every appliance - they don’t want to give it all away. They want to see how the negotiation goes.
Home Inspection condition is common to see in an offer, usually buyers request 7-10days time needed to fulfil this step in the buying process. Buyers are looking to see if there are any issues with the home either require an easy fix or extensive amount of work. Buyers will either want to move forward with a waiver ,re-negotiate the terms of the contract or walk away from the deal.
Condo / Co-Op Assessments
These are used to maintain the building’s common areas, like the roof or aesthetic improvements, and sellers typically need to settle if there’s an open assessment. That becomes a negotiation between the seller and the buyer.
Now this is where things get exciting. You've got an offer or maybe two or three at once!
In most cases, your home’s list price won’t be the offer price. When it comes to settling on that final magic number, you’re going to be negotiating. That’s something your REALTOR® is an expert at, but here are some key strategies for owners: It’s a conversation. Don’t be offended by low offers and conditions. No one is forcing you to accept them. Think of it as a starting point to have a conversation. Price isn’t the only thing. You can negotiate on price, offer conditions, assets in the home. Don’t get stuck on one thing. Remember, even 1% more for your home can mean thousands to your bottom line. And once you agree, the buyer provides a deposit cheque to be held in trust until the conditions are met. The conditions usually have a set time for removal and usually include things like an inspection and financing. Once the conditions are met, the buyer signs a waiver and the deal is firm. Now you sit and wait till closing day, the day you hand the keys over and the day you get paid.
NEGOTIATING THE PURCHASE
POINTS OF NEGOTIATION
NEGOTIATING THE PURCHASE CONTRACT