How to negotiate a purchase agreement with buyers or agents

How to negotiate a purchase agreement with buyers or agents

Negotiating a purchase contract can lead to a better deal. Buyers deserve to know the terms of the trade and have a voice in the situation where they are investing hundreds of thousands of dollars. Similarly, sellers need to know what can be negotiated and if there is room for selling costs, as this can affect the bottom line.

Some buyers’ agents rarely discuss the negotiable items in a home purchase contract with their clients. They just check the boxes according to local conventions and that doesn’t really give the buyer or seller a choice in this regard.

What is a purchase agreement?

What Is a Purchase Agreement?

A purchase contract is an offer made by the buyer that includes details of what is included in the sale and when the buyer can take possession of it. It also takes care of who pays for what as the transaction progresses.

Almost all states use their own home purchase contract. These contracts are commonly known as “one to four family residential contracts” in Texas. They are developed by the Texas Real Estate Commission. It’s called the “California Home Purchase Agreement and Joint Escrow Instructions,” and the California Association of Realtors updates it in depth almost every year.

In the real estate sector, negotiations take the form of counteroffers. The offer is the way buyers tell you that they are interested in your property. The way you tell them their offer is unacceptable, but you are willing to negotiate, it is the counteroffer. You have to know what you want. And in case you can’t get it, you also need to create a temporary save position, the minimum it will accept.

The correct way to receive an offer

purchase agreement negotiation

When you receive an offer, take responsibility and lead the process. Here is a list of questions to ask when you receive an offer.

  • Deposit: how much and who has it? (Is this a serious offer, as evidenced by a sufficient deposit?)
  • Price: what exactly do buyers offer?
  • Deposit: in cash, and if not, why not?
  • Conditions: New first loan?
  • Occupation: How soon do I have to leave?
  • Contingencies: Is there anything that could interfere with the deal?

As you ask these questions, make sure you understand the answers that are given to you.

Usually, the offers are not great or terrible. They are somewhere in between. Buyers can give you certain things you want in exchange for picky things you don’t want to give up. List the pros and cons of the offer to see what the tradeoffs are.

Understand contingency clauses

Understanding contingency clauses

A contingency clause is an additional condition (in addition to all the master key that is already part of the document). Conditional clauses are a way that buyers (and sometimes sellers) can choose not to participate in the transaction. Their goal is to remove as few contingency clauses as possible from the transaction buyer and limit, based on time and performance, those that are included. Pay particular attention to contingency clauses. Below is a list of some common contingencies.

Contingent sale

Buyers will buy based on the sale of their current home. This offer is not suitable because it means that the sale of your house depends on the sale of another house with a different group of sellers and buyers.


Buyers will buy based on obtaining new financing; If they are already fully pre-approved, there may be nothing to worry about.


The purchase depends on the buyers’ ability to move into the home within a specific time period.

Disclosures / Inspections

Buyers will only buy if they approve your disclosures and professional inspection. They will usually ask for a set period of time for this, usually a few weeks. You probably can’t sell without this possibility.

  • If you receive an emergency offer, analyze it by answering the following three questions:
  • Is the contingency reasonable?
  • Does the contingency cancel the value of the offer?
  • Can you live with the contingency or should you limit it?

You can limit the contingency by insisting that it be done within a specific time frame.

If you receive an emergency offer, analyze it by answering the following three questions:

  • Is the contingency reasonable?
  • Does the contingency cancel the value of the offer?
  • Can you live with the contingency or should you limit it?

You can limit the contingency by insisting that it be done within a specific time frame.

Make a counteroffer

Making a counteroffer

When you are presented with an offer, you generally have three options.

  • Accept it exactly as it is
  • refuse it
  • Decline, then counter with an offer of your choice.

Remember that you cannot accept the offer and modify it at the same time. As soon as you make any changes to the offer submitted by buyers, it will be a completely new offer. When you reject the offer of buyers, they have every right to forfeit the potential offer. You should almost never decline an offer without a counteroffer. Simply saying no doesn’t give buyers a chance to come back.

In general, there are four areas where you may want to counter the offer.

  • Price
  • terms
  • Occupation
  • Unexpected

However, keep in mind that if you create a counter in one of these areas, you have rejected the buyer’s offer and the buyer may decide that they want to change some of the other areas or just walk away.

Counteract the price

Countering the Price

Price is often the main concern of buyers and sellers. Yes, you want and should be able to get your price. However, remember that buyers feel the same way.

Countering the Terms of the Purchase Agreement

Countering the Terms of the Purchase Agreement

Conditions can offer the most flexibility. Most of the time, buyers look for a new loan and plan to make a down payment. But often you will be asked to do some of the financing, perhaps a second or third mortgage as part of the down payment.

Remember that everything is negotiable. If you are willing to defer part of the financing, you can accept the terms offered, but change the loan term or interest rate. (The shorter the mortgage and the higher the interest rate, the better the deal for you.) If you transfer the “document” (a second mortgage or less), try to include a monthly payment. At least equal to the interest owed and also includes a late payment penalty for not being able to pay on time.

Counteract the contingencies of the purchase agreement

Countering on the Contingencies of the Purchase Agreement

In the counteroffer, there are two ways to address an unwanted contingency clause: the simple approach and the diplomatic approach. It can be straightforward and simply cross out the eventuality. You will not accept it. This clearly indicates where you are, but may offend the buyer and cost you a deal. You can limit a contingency by time (work must be done in a specific period) or by cost (you are willing to incur an expense, but only up to a specific dollar limit).

Signing and acceptance of the purchase agreement

Signing and accepting the Purchase Agreement

You have not accepted an offer until both parties have signed the exact same sales contract. As long as you have not registered, you can refuse to accept the offer. (However, if the offer is for the price and terms you listed the property for, you may still owe a commission to the agent.)

It is important to understand that the agreement is not made exactly at the time of signing. This is done when the agent (or you) communicates the fact that you have signed to the buyers. In practice, the agent often calls buyers immediately to tell them that they have accepted and then gives them a signed copy (by you) of the sales contract. From a technical point of view, buyers can withdraw the offer at any time before they know it has been accepted (just as you can withdraw a counter offer at any time before knowing that buyers have accepted it).

Always keep copies of your purchase agreement and other documents

Always Keep Copies of your Purchase Agreement and other Documents

The agent (or buyers) should give you a copy of everything you sign. Make sure you have this copy and stick with it. You can’t say you sold your home until the title is registered and you receive your check, but once the purchase contract is signed and delivered, you can relax a bit.

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