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Contingencies, Negotiating and Deposits

Contingencies - “Subject to” Clauses

If your offer says "this offer is contingent upon (or subject to) a certain event," you're saying that you will only go through with the purchase if that event occurs. Here are two common contingencies contained in a purchase offer:
 
  • The buyer obtaining specific financing from a lending institution: If the loan can't be found, the buyer won't be bound by the contract.

  • A satisfactory report by a home inspector: for example, "within 10 days after acceptance of the offer." The seller must wait 10 days to see if the inspector submits a report that satisfies the buyer. If not, the contract would become void. Again, make sure that all the details are explicitly stated in the written contract.

‚ÄčNegotiating Tips

You're in a strong bargaining position, that is, you look particularly welcome to a seller, if:
  • you're an all-cash buyer

  • you're already have a preapproved mortgage and you don't have a present house that has to be sold before you can afford to buy

  • you’re able to close and take possession at a time that is especially convenient for the seller

In these circumstances, you may be able to negotiate some discount from the listed price.
 
On the other hand, in a "hot" seller's market, if the perfect house comes on the market, you may want to offer the list price (or more) to beat out other early offers.
It's very helpful to find out why the house is being sold and whether the seller is under pressure. Keep the following considerations in mind:
 
  • every month a vacant house remains unsold represents considerable extra expense for the seller

  • if the sellers are divorcing, they may want to sell quickly

  • estate sales often yield a bargain in return for a prompt deal

Earnest Money
 
This is a deposit that you give when making an offer on a house. A seller is understandably suspicious of a written offer that is not accompanied by a cash deposit to show "good faith." A real estate agent or an attorney usually holds the deposit, the amount of which varies from community to community. This will become part of your down payment.

©2016 Richard M. Higgerson - Licensed Broker VT/NH - Four Seasons Sotheby's International Realty  - 17.5 Lebanon Street, Hanover, NH 03755- 802.291.0436 - rick.higgerson@sothebysrealty.com