NEGOTIATE
...your offers step by step
1. The Purchase
Agreement​
The Residential Purchase Agreement (also known as the RPA) is the contract that California Association of Realtors® has created for the purchase of residential property. We regularly attend intensive contract classes and meetings so that we may better explain key aspects of the contract . It's important, as you receive offers, to carefully review each aspect of the contract and how it pertains to your sale. This is the time to ask any questions that you might have.
2. Property Investigation,
Loan and
Appraisal​
The contract contains contingencies that are essentially contractual protections that allow the buyer to cancel the contract based on certain conditions. Your buyer will, typically, have a time period to investigate the property, obtain financing, verify the value of the property, and exit the contract, if needed, without penalty.
3. Contingency Period
Include: Property Investigation, Appraisal, Loan​
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Your buyer will have the right to investigate all conditions and elements of the property. They will engage the services of multiple advisors and inspectors. This is usually the primary contingency where a buyer will decide whether to move forward with the transaction and will include inspections to make sure all the home's systems and components are in good working order. If defects are discovered, or repairs are needed, the contract may need to be renegotiated.
4. Property Investigation​
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This is when your buyer will check into schools, crime, permit history and anything else that may be pertinent to a buyer's decision to purchase.
5. Loan Contingency​
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If your buyer is unable to secure a loan, mortgage terms and maximum interest rate as stated in the contract they may legally cancel their offer.
6. Appraisal Contingency​
If the appraised value determined by your buyer's lender's appraiser is less than the agreed upon purchase price, your buyer will have the option to ask you to renegotiate or cancel the agreement. The buyer's contingencies remain in place until they are actively removed by the buyer. They do not expire. In the event a buyer is not performing in removing their contingencies, the seller may issue a notice to perform at the appropriate time. This will allow the seller to cancel the sale.
7. Additional Provisions & Home Warranties​
A home warranty can offer buyer protection against some of the things that can go wrong early on following the close. Often the seller will provide a one-year home warranty plan to the buyer, which offers protection on the property if any of the covered items fail during the first year.
8. Accepting the Right Offer
​As you can see there are a lot of terms to consider when reviewing offers, above and beyond the best price. Depending on the market, you may find yourself reviewing multiple offers or waiting for an offer. In either case most sellers would, ideally, like a high price, but most also are looking for a buyer who will close escrow. Offers are often imperfect and usually the beginning of a conversation so it's important to take some time with your agent, ask questions and draft a counteroffer that addresses most of your wants and certainly all of your needs.
