So, you have an accepted offer. Congratulations! But don’t celebrate just yet. Every qualified REALTOR® knows the best time to raise a glass is after closing. To get there, it’s imperative the buyer and seller pay attention to the fine print.
“A typical contract can be fifteen pages or more,” says Tina Balaka, managing broker of Shorewest, REALTORS® in Greenfield. “A client’s eyes can glaze over staring at the details. Our job is to explain the fine print and bring things into focus.”
Know the Rules
Fine print is more than a playbook. It defines the rules.
“These contracts are our Bible,” says Abby Hauke, general sales manager for First Weber Lake Country. “They are legal, binding contracts. If they can’t meet the terms of a contract, a buyer or seller could find themselves in trouble or a sale could fall through. At the same time, the fine print can protect a client if you carefully work through it.”
That being said, when you’ve got an accepted offer and are ready to take the next step, plan on spending some quality time with your REALTOR®.
“A REALTOR® should review an offer with a buyer or seller in person, over the phone or in a virtual meeting,” says Balaka. “Each person should have a copy of the contract in front of them and they should go through it simultaneously so questions can be raised and issues can be discussed every step of the way.”
Minimize Risk
Your REALTOR® can protect your interests by writing contingencies into the contract.
Contingencies reflect what you are capable of achieving in terms of deadlines and what you hope to walk away with. It may include special terms for a buyer’s financing, home appraisal, inspection, inclusions, closing dates and more. There are advantages to contingencies for both the buyer and seller.
“Earnest money often catches buyers by surprise,” says Hauke. “They may not realize that they must, in good faith, provide the listing seller with typically 1% of the purchase price in advance of the closing. It is not guaranteed to be returned should the offer fall through but the REALTOR® can write a contingency that the buyer will get the earnest money back and specify under what conditions.”
It’s also common to see contingencies relating to appraisal and inspection.
“If a property appraises below the purchase price, the seller can write in a contingency to cover the gap,” says Balaka. “Another common contingency is the right to cure. If a problem is found during inspection, the seller would have the right to fix it. But it has to be spelled out in writing or the buyer could walk away.”
Realistic Inclusions & Exclusions
When you tour a home, don’t assume everything you see is what you will get. At the same time, if there is something you like, by all means, ask for it. Just put it in writing.
Balaka oversees more than a thousand real estate transactions a year. She says, “Kitchen appliances, the washer and dryer, window treatments and light fixtures are usually included. But, anything the buyer is expecting should be written in the offer so it is very clear.”
Realistic exclusions would be the seller’s personal property, including furniture and décor elements.
Balaka continues, “When it comes to personal property, assume it is the sellers and will be gone. The buyer can write a contingency for certain items but it’s best to handle that in a separate contract.”
The seller also can also create “take away” contingencies. Perhaps you have a rose bush planted in memory of a family member or an antique chandelier. If it is an accepted contingency in the real estate contract, you can take it with you.
Fine Print and the Bottom Line
Know what you are signing.
That’s the bottom line and something Hauke underscores with the more than 100 agents she manages.
She says, “A real estate contract doesn’t account for getting cold feet and changing your mind. If a client says, ‘Get me out of this contract,’ an attorney gets involved and nobody wants that. It’s so much better when the buyer and seller thoroughly understand the fine print.”
The REALTOR® Advantage
A REALTOR® is a member of the National Association of REALTORS®, is committed to a Code of Ethics and has the expertise to find the right home for everyone. Look for the “R” to determine if your agent is a Realtor.
Locally, the Greater Milwaukee Association of REALTORS® is a 5,500-member strong professional organization dedicated to providing information, services and products to help REALTORS® help their clients buy and sell real estate. Visit gmar.com for more information.