The Price Is Not Always Right
“The higher the price, the better the offer.” Do not let yourself be fooled by this popular misconception. Price is not always the determining factor when accepting an offer for several important reasons: the initial offer is usually not final, and there are a number of terms and conditions that may influence the final agreed to price. You can rely on me to help you thoroughly evaluate and understand every proposal without compromising your marketing position.
Negotiating the Right Way
Capital Residential takes the ethical responsibility of fairly negotiating contractual terms very seriously. It is our job to find a win-win agreement that is beneficial to all parties involved. You may even have to deal with multiple offers before ratifying the one you judge to be the most suitable for you – and as your advisor, I will guarantee a thorough and objective assessment of each offer to help you make the right choice. Our fiduciary responsibility is to you, our client, so you never have to be concerned that your negotiating position is being compromised by an unskilled real estate agency.
The Initial Agreement and Deposit
An effective agreement is a legal arrangement between a potential purchaser and the property’s seller. The Offer to Purchase is meant to be a legally binding agreement that requires a financial consideration. This consideration (initial and additional deposit) is typically held in the seller’s agent’s escrow account pending the fulfillment of conditions or contingencies in the final Purchase and Sales Agreement. The buyer’s agent typically drafts an offer to purchase, which, if acceptable is signed by the seller. The purchase and sale agreement is typically drafted by the seller’s agent or Attorney, then both respective parties legal counsel will review and add language specific to the transaction at hand.
Keep Written Records Of Everything
For the sake of clarity, it will be extremely useful to transcribe all verbal agreements including counter-offers and addendums, and convert them to written agreements to be signed by both parties. I will assist you in drafting all the paperwork for your sale and make sure that you have copies of everything.
Stick to the Schedule
Now that you have chosen your offer, you and the buyer will be given a timeline to mark every stage in the process of closing the real estate transaction. Meeting the requirements on time ensures a smooth flow in negotiations and also ensures that each party involved is not in breach of their agreements. During the process we will keep you constantly updated so you will always be prepared for the next step.
Inspection and Appraisals
Most buyers will have the property professionally inspected by a licensed home inspector within the timeframe that was agreed upon in the effective offer to purchase. Some buyers will have several different inspectors inspect the property, if they wish to obtain professional opinions from inspectors who specialize in a specific area (e.g. roof, HVAC, structural, electrical, plumbing, pest, 21-E, Radon, etc). If the agreement is conditional upon financing, then the property will be appraised by an independent licensed appraiser of the buyer?s lender to determine the fair market value for the lending institution. This is done so that the lending institution can confirm their investment in your property is accurate.
The Closing Attorney
The attorney for the buyer’s lender will be selected as the closing attorney, whose job is to examine and insure clear Title. After researching the complete recorded history of your property, they will certify that 1.) Your Title is free and clear of encumbrances (e.g. mortgages, leases, or restrictions, liens) by the date of closing, and 2.) All new encumbrances are duly included in the foregoing Title.
Contingencies
A contingency is a condition that must be met before a contract becomes legally binding. For instance, a buyer will usually include a contingency stating that their contract is binding only when there is a satisfactory home inspection report from a qualified inspector or a lender provides them with a firm commitment for financing.
Before completing his or her purchase of your property, the buyer goes over every aspect of the property, as provided for by purchase agreements and any applicable addendums. These include:
- Obtaining financing and insurance;
- Reviewing all pertinent documents, such as preliminary Title reports and disclosure documents;
- Inspecting the property. The buyer has the right to determine the condition of your property by conducting a range of inspections, such as roof, termite/pest, chimney/fireplace, property boundary survey, pool/spa, arborist, mold, lead based paint, HVAC, etc.
Depending on the outcome of these inspections, one of three things may happen:
- Either each milestone is successfully closed and the contingencies will be removed, bringing you one step closer to the closing; or
- The buyer, after reviewing the property and the papers, requests a renegotiation of the terms of contract (usually the price); or
- The buyer notifies us that they wish to terminate the agreement and return their deposits. In this case your real estate advisor will attempt to uncover the true reason for the buyer’s change of heart and see if the transaction can be salvaged.
How do you respond objectively and fairly to the buyer when a renegotiation is demanded? This is when the help of an experienced real estate advisor at Capital Residential can make a real difference in the outcome of the transaction. Having dealt with various property sales in the past, understanding what is reasonable and what is not, is the level of essential experience you can rely on with me as your agent.
Loan Approval and Appraisal
We suggest that you accept buyers who have a lender’s pre-approval, approval letter, or written loan commitment, which is a better guarantee of loan approval than a pre-qualification or no documentation from a lending institute. Expect an appraiser from the lender’s company to review your property and verify that the sales price is appropriate. Again, as your Capital Residential real estate advisor I will oversee the required paperwork that the buyer must present with their offer.
The Closing
If you have come this far, this means that it is almost time for a congratulations, but not yet. Do not forget to tie up these loose ends:
- Final Walk-Through Inspection
More of a formality than anything else, the final walk-through usually takes place the day before, or the day of the closing. The buyer visits the property to verify that all is in working order, the condition is the same as when the buyer last viewed the property, and that there are no extra items left behind. At this point, the property should be clean and broom swept. - Smoke Detector/Carbon Monoxide Detector Inspection
All Massachusetts property owners are required to have their home inspected by the local fire department to insure working smoke and carbon monoxide detectors are placed in accordance with Massachusetts law. A certificate must be provided to the buyer at closing. I will coordinate the inspection and attend if you are not available. The cost for this inspection usually ranges from $50.00 to $150.00. - Final Water Meter Reading
As a property owner, you are required to obtain a final water reading from the city’s water department. I will assist in coordinating this final reading and make sure the paperwork is provided to the closing attorney for the H.U.D. settlement statement. - 6D Certificate
As the seller of a condominium, you are required to provide the buyer with a 6D certificate. This certificate is an affidavit signed by the condominium association trustee(s) verifying that all condo fees and special assessments have been paid accordingly and there are no outstanding fees or liens associated with the unit. Typically, there is a small fee payable to the association for the 6D certificate. - Cancel Home Services and Utilities
We can provide a list of useful numbers for the termination of home services and utilities after the closing occurs. - Be Prepared
We are ready to assist you should an unforeseen glitch arise, even at this last stage. If something at the property breaks down or the buyer’s loan does not pull through on time, there is no need to worry. We have encountered these problems before. We know how to handle them efficiently and in a stress-free manner.
Closing
The closing agent will furnish all parties involved with a settlement statement. This summarizes and details the financial transactions enacted in the process. The buyer(s) will sign this statement and then you will sign as well as the closing agent, certifying its accuracy. If you are unable to attend the scheduled closing, then arrangements can be made depending on the circumstances and the notice that we receive. If you are receiving funds from the transaction, you can elect to either have the funds wired electronically to an account at your financial institution, or have a check issued to you upon the Deed being recorded at the Plymouth County Registry of Deeds. Many clients and their attorney’s chose to close at the Registry of Deeds so the recording is immediate and the funds can be dispersed. The seller should arrange to have all property keys and any other important information for the new purchaser at the closing, so that the purchaser may receive these items at this time.
Now it is time for congratulations!
