Navigating the Four Key Negotiations in a Real Estate Contract

Getting an accepted offer is only the first negotiation in a real estate contract. In most contracts, there are four key points where the sale can be renegotiated. Today, I wanted to share some important information about the four key negotiations that take place in a real estate contract. Let's look at each one:

The first negotiation is the Original Offer and Acceptance. This is between the buyer and the seller, where the buyer submits an offer and the seller accepts, counteroffers, or declines the offer.

If the buyer and seller can come to terms at this point congratulations, we now have an executed contract.  Once we have an executed contract there is typically a home inspection.  The home inspection is performed to identify any issues with the property. 

The inspection results may lead to a second negotiation between the buyer and the seller. This is to address any discrepancies or repairs that need to be made. This falls under the Home Inspection Contingency.

The next step is to determine the value of the property, which is done by an appraiser. The appraiser is an independent professional hired by the bank providing the loan.

If the appraised value is lower than the agreed purchase price, this may lead to a negotiation between the buyer and the seller to determine how to proceed. This would fall under the financing contingency.

If your contract has made it this far congratulations.  Three down and one more to go. The final negotiation is the Final Walk-Through and Condition of the Home.

This takes place just before closing and allows the buyer to verify that the property is in the condition that was agreed upon in the contract.

Currently any agreed-upon repairs are checked.  As well as any discrepancies or items that may have been hidden prior to moving out. These can be addressed in this final negotiation.

As you can see it’s a delicate process to get everyone to the closing table. I hope this information has clarified the negotiations involved in a real estate contract. If you have any questions or please do not hesitate to reach out.