The process of negotiation concludes with all parties acknowledging the final draft of an offer. Once this occurs, specific conditions must be fulfilled before the transaction is considered “firm”. Alternatively, negotiations can yield unconditional offers without any specific contingencies attached. These are immediately binding without any further requirements or approvals necessary for closing.
Many different parties are involved in completing a real estate transaction. If any of these services delay, it can affect the possession date. Discussions may be necessary for amendments, penalties, or refusals to follow through in attempt to find another purchaser.
Conditional Offers
Buyers and sellers can include numerous clauses in a contract to allow them to withdraw from the deal. Major considerations include deficiencies or incomplete due diligence. The buyer usually has a set time period to fulfill contingencies.
The most common subject clauses pertain to the following areas:
- Financing: Allows the buyer to make the purchase dependent on securing suitable financing from a lender.
- Inspection: Gives the buyer the right to conduct a professional examination of the property to assess condition and identify any potential issues.
- Legal: Provides consultation with a lawyer to ensure full understanding of rights and obligations under the contract.
- Appraisal: An evaluation of the property to determine its market value and ensure it meets the lender’s requirements for financing.
- Survey: Verifies that the property boundaries align with expectations. Ensures there are no unexpected disputes or encroachments that could impact ownership rights.
In some instances, sellers may want to evaluate the inclusion of an escape clause to protect their interest and allow an exit if an alternative offer is presented. This provides the an option to terminate the contract if particular conditions are not met or if certain events occur.
Closing the Deal
The fulfillment of these conditions can be time consuming and labor intensive if they require specific documentation or approval from third-parties. In most cases, there are two willing sides working together to complete a transaction with minimal friction.
Matthew Aaron will be able to provide insight on the ideal course of action if there are discrepancies. Regardless of an arguments validity, there may be a request for rectification or a discount to the purchase price as motivation to complete the sale. His industry experience and dynamic negotiation style will assist with eliminating possible forfeitures at this time.