If you are ready to make an offer on a home, chances are it comes at the end of a long and probably frustrating process. Narrowing down your wish list and finding a home within your budget that meets your needs is not always easy, and you still have a long process ahead to get to closing. Therefore, you may be ready to sign that purchase contract quickly and get things moving forward.
However, that purchase contract sets the tone and terms for the rest of the transaction. You may not realize you have the option to negotiate some of the terms in your real estate contract, and you would be wise to take advantage of that. In fact, there are some contingencies you should not omit from your purchase agreement.
Get ready to negotiate
Contingencies in a purchase agreement are clauses that name those limited reasons why one or the other party may call off the sale. In other words, the sale of the property or certain elements of the sale will only proceed once meeting these certain terms. Some contingencies are standard, but you will want to be certain that any such clauses in your purchase agreement work in your favor. For example, you may want your contract to stipulate the following contingencies:
- Closing based on whether you acquire a mortgage at a specific interest rate or a special type of mortgage, such as a VA loan
- A faster closing date if you offer to pay cash
- Assistance from the seller to cover some or all of the closing costs
- An offer higher than the asking price in exchange for closing costs
- Termination of the agreement if the home inspection reveals costly or significant flaws
- Specific appliances, furnishing or other items you want to convey with the house
- Termination of the agreement or delayed closing if you are unable to sell your present home
Your closing date is also negotiable. You may want to close quickly, or you may have reasons to delay for as long as 60 days, such as relocating from outside Pennsylvania. Each of these terms should be specific and detailed.
Be prepared, though, because the seller will likely want certain contingencies, too, such as wanting to find and settle on a new home before closing on your transaction. This can be nerve-racking for a buyer, but it protects the sellers from losing their home in case the purchase of the new one falls through.