Wednesday, August 29, 2012

The Home Buying Process: Step 5


This is the fifth post of ten in a series about the home buying process.  The purpose of this series is to educate the reader on different steps in the process to ease any anxiety of the unknown.  Whether you are a first-time buyer or have purchased in the past, it is always advantageous to be up-to-date with the latest news and information to make your path to home ownership as smooth as possible.
Step #4:  Making an Offer

Step #5:  Negotiations

You've now entered what could be the most nerve-wracking part of the process for buyers.  It isn't so much the actual negotiations that keep you on edge, but it is the time in between the bits and pieces of news as you wait to hear what the other side thought of your offer or counter-offer.

When your agent submits an offer on your behalf, the listing agent will then present it to the sellers.  This is a time-sensitive offer, so the sellers will review your offer with their agent, and get back to you within the stated period of time (typically about 24 hours).  More often than not, you will receive a counter-offer.

The counter-offer may contain financial concerns, and/ or an adjustment to some of the terms and conditions.  Some common counters include adjustments to closing cost contributions, earnest money, inspection and remedy periods, and final closing dates.  Once a counter-offer comes back to the buyer, the buyer will only receive the items that the seller wishes to adjust.  It is stated in the counter that "all other terms and conditions to remain the same."

The contract is now back in the hands of the buyer.  The buyer can choose to accept, or the buying side can counter again.  This back and forth can go on and on, and this is the period in which your agent becomes valuable in helping you determine which items are worth countering or accepting.  An agent's job is to advise you during this period.  It is important, as a buyer, to remember that anytime you counter, the other side can reject the offer and kill the deal.  So, there comes a time when you need to decide which items are deal breakers, because if you don't, the other side will choose to move on.

Negotiations do not end with the purchase offer.  Following the home inspection the buyer has a chance to request that anything identified in the home inspection be fixed prior to the contract moving forward.  The buyer must work with their agent to consider which items (if any) they want addressed prior to closing.  The seller has the option to deny all or part of the request, and these negotiations are handled in the same way that the counter-offer process with the purchase contract is handled.  My rule with the requests is that you should only request items to be fixed that are dangerous to the health or safety of the buyer.  Little things like malfunctioning doorknobs are the types of things that come with home ownership, and in my opinion, shouldn't be a part of the potential holding up of a real estate deal.  (Are there certain circumstances for such requests?  Yes, but in general, consider health & safety).

After everything is agreed upon, the buyer and seller have a valid purchase contract, and the buyer moves on to securing financing for the deal (Step #6).

There are many more fine details in this negotiations stage.  I hope that my overview gives you a good idea of what is to come, but like I have made clear before, every deal is different.  I would be happy to discuss this in further detail with you, just contact me with any questions that you may have.

Take care,
Scott
click here to find a home for sale in Gahanna Ohio

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