What are the key negotiating points in a purchase agreement?
There are six primary negotiating points a buyer can work with when putting together an offer on a condominium. Each point is outlined below. You want to use the right combination of elements to create the most compelling offer the seller receives. An experienced broker and agent is a valuable tool. Utilize their marketplace knowledge, negotiating skill and experience to help you get you the best value for your money.
Price: The price is the actual dollar amount you will pay for the condominium. This is usually in the form of cash. Price may not represent the amount the deal will cost you – it could be less or more when you work out the other elements of the contact (i.e. closing costs).
Closing: Costs is the expenses to both the buyer and seller for closing the real estate transaction. This cost is separate than the actual price of the property. Generally the buyer pays the closing costs.
Cash: is the primary method of payment to a seller for buying their home. It is generally in the form of a loan payment from a lending institution. However, if you have the ability to pay in all cash down and avoid the lending process, you can often ask the seller to discount the price because it simplifies the closing process.
Financing: is how you will get the money to purchase the condominium. Most financing is in the form of a loan from a lending institution. There are several financng options you can choose from depending on your needs. You may also be able to get financing from your seller.
Timing of closing: Timing is everything when buying a condominium. There are four timing variations around closing. You and the seller both want to close quickly, both want to close slowly, you want to close quickly and the seller slowly or you want to close slowly and the seller quickly. You have the most leverage when you can match with the sellers timing needs. If you and your broker have everything in order ahead of time you should be able to close faster.
Contingency: is an event that must take place before the contact can go through. You should try and remove as many contingencies as possible. The primary contingency you should be able to remove is around your financing. If you have been pre – approved for a loan you have already met this requirement. Work with your agent to figure out which contingencies you can remove and still be comfortable making an offer on the property.