This is usually a contract term that the Buyer can be very flexible with and yet might be a very important aspect for the Seller. Sometimes the Seller wants to sell immediately due to financial constraints and sometimes the Seller needs to wait for a specific period of time so they can make arrangements to move, make a purchase, stay within IRS guidelines or some other important circumstance. I have seen the most success with Buyers that place on the Contract Offer the earliest possible specific date to close yet let it be known verbally to the Seller that this is an area with flexibility and the Buyer would open to hear a closing date that would be more suitable to the Seller.
|Miscellaneous Due Diligence Periods, Visual Inspections or Partner Approvals|
These contingencies are used by Buyers to give themselves an avenue to cancel the contract, within a specific period of time, without any repercussion. In fact, the Buyers can actually negotiate contracts on properties without initially seeing them and then just cancel the contract if they decide not to make the purchase after the fact. The issue is that Sellers are much savvier than they used to be, especially when the Sellers are located in major metropolitan areas like Fort Lauderdale. The Sellers of today know that miscellaneous contingencies in a contract is a sign of a Buyer that might be negotiating, outside of good faith, with the intent to not actually execute the purchase but just hold the property off the market and in their control. This is not a very motivating position for the Seller and usually does not produce the best price and terms for the Buyer. From the Sellers point of view it takes the property off the market making it a less attractive pursuit to other potential Buyers in the marketplace during the contingency period since actual availability is greatly in question. No one likes to waste their time and you should not either. Be sincere in your dealings and present yourself to all parties involved as a serious Buyer worth any efforts required by the Seller to provide you with the information you need to make a sound purchasing decision.
This is a specific amount of time that the Buyer has to inspect the property and discover any unacceptable issues or facts that materially affect the value of the property to the Buyer. This would include any mechanical issues (air conditioning unit, hot water heater, roof condition, electrical system, plumbing, etc...) , violation of government laws, rules and regulations, other than those the Buyer can readily observe or that are known by or have been disclosed to the Buyer. The Inspection Period should only be as long as needed to complete the inspections the Buyer deems necessary. The Buyer should utilize this contingency only to allow an opportunity to inspect and discover any potential issues the Buyer does not feel confident about regarding the transaction. Any unnecessary lengthy inspection periods usually signal the Seller into questioning the acting good faith of the Buyer and could result into less price flexibility. Make the deal look as attractive and amiable as possible while still allowing yourself enough time to carryout necessary inspections.
If the Buyer has mitigated as many of the potentially objectionable contract terms as possible for the Seller, all that is left to negotiate going forward will be the price. The Buyer has placed themselves in a position that the Sellers first impression of the Buyer and offer is one of seriousness and strength. Now the Buyer will be in the best position to disclose the true acceptable bottom line sales price. Decisions on Buyer purchase price should always be made based on current value and not current asking prices. Sometimes asking prices are high when compared to previous sales and current market conditions, other times asking prices are already very attractive and all that is left to discover is the Sellers TRUE bottom line for the best deal possible.
Bill Cott | Seawatch Realty, Inc | Licensed Real Estate Broker: (954) 494-5812
Buying a Southeast Florida Condo
Condos, Co-ops, Townhomes and Villas
We are local real estate professionals with a special focus on beach area Condos, Co-ops, Townhomes and Villas. If you are giving serious consideration to purchasing a beach area property, we invite you to contact us. We will assist you in examining the marketplace for the many options that are available to you, within and surrounding your general set of criteria. After all, you are really purchasing a lifestyle that the property affords you, not just a piece of real estate.
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