As a Buyer, you are in a better bargaining position if you have obtained a pre-qualification or pre-approval letter from your lender. It shows the Seller you are serious about purchasing their home. Also, the fewer demands for seller financed closing costs and other contingencies such as selling your current home prior to purchasing a new home, the better bargaining position you are in to negotiate a lower sales price. Therefore, the cash buyer is probably in one of the best bargaining positions to negotiate the best sales price.

Offers

A written Offer To Purchase contract should specify the price and all of the terms and conditions of the purchase contract.

Financing Terms and Conditions

The contract specifies the purchase price, downpayment amount, financing terms and the amount of Earnest Money Deposit accompanying the offer and how is it to be distributed in the event the contract is not executed. The Earnest Money is a monetary deposit made by the buyer which accompanies the Offer to Purchase. It shows "good faith" and the buyer's intention to complete the purchase. Upon contract acceptance, this deposit becomes part of the money to close.

The contract also stipulates that the Seller will promise to provide clear title or ownership at closing usually in the form of a General Warranty Deed.

The contract also stipulates who will pay for the title insurance, survey, termite inspections and buyer's closing costs. Frequently, the Buyer pays for the home inspections, survey and title insurance on the mortgage note while the Seller pays for title insurance on the deed and repairs to General Warranty Items and WDO(s) as specified on the home inspector's report. The Seller is only responsible for repairs up to the Maximum Repair Limit specified in the contract.

With an "As Is" Contract, the Buyer accepts the property in its current condition after conducting the home inspections or may elect to cancel the contract if the estimated repairs exceeds the maximum repair limit specified in the contract and receive a full refund of the Escrow Deposit.

Property Description

The street address, legal description, Folio Number, Tax-Id and Section/Township/Range designation are used to uniquely identify the property or parcel of land.

Disclosures

The Buyer is provided with several disclosures or addendum(s) which should be read carefully before proceeding with the Offer To Purchase. The most common types of disclosures are the Seller's Property Disclosure Statement, the Homeowner's CC and R's (if applicable) and state-specified environmental disclosures such as the Lead Based Paint or Mold Disclosure.

Time Limitations

Every contract has time stipulations such as the time period when an Offer To Purchase expires (typically one or two business days) or the time frame in which the buyer has to submit the loan application and obtain a loan commitment from a lender. The time periods for completing the inspections, requesting repairs and releasing the home inspection contingency are also specified in the contract.

The time period for closing a real estate transaction is also specified and is typically from four to six weeks which gives the buyer adequate time to obtain financing, complete the home inspections and for the lender to prepare the loan package and complete title search, survey and home appraisal.

Contingencies

A list of all contingencies necessary to satisfy the terms of the contract are itemized. Two of the most common contingencies are the financing and home inspections contingencies.

Financing Contingency typically refers to the Buyer's ability to obtain a specific type of financing at a rate not to exceed a specified amount from a lending institution. This part of the contract also specifies the downpayment amount, amount financed, timeframe to submit the loan application and the financing commitment date.

Home Inspection Contingency typically specifies a satisfactory completion of a home and termite inspection conducted by a professional and may also specify General Warranty and Wood Destroying Organisms Repairs Limits. The Repair Limits specify the amount a Seller is willing to pay to remedy defects identified during the home inspections.

Counteroffers

As a buyer, the seller may accept, reject or counter your Offer To Purchase. You may either accept the seller's counteroffer, reject the counteroffer or respond with another counteroffer. Counteroffers stipulate a change(s) in the terms or conditions of the purchase. Responding to a counteroffer with a subsequent counteroffer supercedes the original counteroffer; consequently, the seller is under no obligation at this point in the negotiation to honor a previous offer or counteroffer.