Making an offer to purchase real estate generates a very large financial obligation on the part of the aspiring buyer. Real property in New York will typically feature a six or seven-figure price tag, and people often need a full 30 years to pay off their mortgages. Not only does someone effectively commit to follow through with a purchase, but they also put down earnest money to show the seller that they are sincere about following through with the transaction. Yet, they could end up owning a lemon or losing thousands if they cancel the closing.
Thankfully, there are ways to minimize personal exposure as someone making an offer on real property in New York. Including the right terms in an offer or in an agreement negotiated with a seller can help protect the buyer and their resources. What inclusions help limit a buyer’s risk when making an offer?
An offer effectively commits a buyer to follow through with a purchase, although there may be some negotiation between them and the seller before they arrive at the final terms. Many buyers include contingencies in their offers in case of unforeseen challenges. People can potentially include clauses in their contracts that allow them to cancel a transaction if there is an issue with the inspection, a low value set in an appraisal, an issue with financing or other challenges that would either alter the value of the property in the perception of the buyer or functionally prevent them from completing the transaction. Contingencies help ensure buyers will get their earnest money back if they cancel a closing.
A post-closing occupancy agreement
People often want to get the keys as soon as they sign the paperwork so they can take possession of their new property and begin the moving process. However, with low supply on the real estate market in recent years, buyers often have to be a bit more flexible. Negotiating terms that allow the seller to remain at the property temporarily after closing could be what makes a buyer’s offer attractive to the seller. The buyer can also assess a reasonable charge on a daily basis until the seller is able to leave the premises so that they can take possession.
Including the right terms in a real estate offer or purchase agreement may help buyers reduce their personal risk. Seeking legal guidance is, therefore, generally a good idea before committing to any kind of contractual relationship.