Terms and Conditions are the Heart and Soul of a Real Estate Transaction
Price plays the starring role of most home sales, while Terms and Conditions are often considered the supporting cast. In reality, the Terms and Conditions of a real estate transaction will likely determine whether your home sale is a resounding success or an event you want to forget.
Every home listed for sale has one major thing in common. It has an asking price. A successful home sale starts with finding a buyer who will pay the asking price, or more. It is evident that price is important, but don't overlook the Terms and Conditions of the sale?
It is interesting to note that in Pennsylvania, the STANDARD AGREEMENT FOR THE SALE OF REAL ESTATE reserves one line of its 14 pages to price and the remainder to terms and conditions. Indeed, it is obvious why this is the case, but it does embellish my point. Without Terms and Conditions that are clearly understood and responsibly met by all parties in a real estate transaction, there will be No sale price because there will be No sale. I would further state that reasonable ~ (and I use the word cautiously) Terms and Conditions are the keys to a happy and smooth real estate transaction.
Getting the asking price or better is excellent, but it is the orchestration of a well-planned real estate deal that brings satisfaction. No one cares for a "tough deal" where the buyer and seller are scratching for every inch of turf because the Terms and Conditions were not well defined. It creates ill will and can make real estate professionals look, well, not professional. Furthermore, what good does it do if the price you get for your home erodes from renegotiating the Terms and Conditions to save the deal?
Specific Terms and Conditions like the settlement date are required, but there may be more to evaluate. If you are a buyer, you may want to consider moving things into the home before settlement. The pre-settlement possession addendum would work nicely here. The seller may find themselves in a position where they need to occupy their home post-settlement. The standard document used in this case is the post-settlement possession addendum. In either case, these things can be negotiated upfront.
Another common condition of sale employed by buyers is the home inspection contingency. This contingency gives the buyer approval to have home inspectors investigate the property to ensure the buyer's satisfaction with its condition. If it is acceptable to the buyer, the transaction continues. If it is not acceptable, the buyer can terminate the agreement. The buyer can consider a third option, which involves renegotiating or requesting that the seller repair, replace or credit the buyer an amount of money that will make the home acceptable to the buyer. While inspection terms and Conditions are a fundamental part of our agreement, they often open the door to renegotiation to keep the deal intact. There are times when the parties may be better served to negotiate Terms and Conditions of the contingencies at the onset of the deal when circumstances are less pressing.
The point is a simple one. There are as many considerations in a real estate transaction as there are stars in the sky. Our standard agreement is a good start. A well-versed real estate agent can supply both the buyer and seller with valuable options that go above and beyond the status quo.
There are no two properties alike, and no two people that are the same. Every real estate transaction is unique unto itself. The success of your real estate transaction could rest on the experience of your Realtor® and the planning of Terms and Conditions.
Knowledge is Power!
Jeffrey C. Hogue