I am back: Purchase Price in Real Estate Purchase Contract

I am back from Moab. Our friends had a reception in Wilderness House. Amazing view. Take a look at my picture.

Going back to business, and continue the discussion about one of the most important real estate document-Real Estate Purchase Agreement.


What is Purchase Price? If I represent buyers, I always recommend and do House Comparison before we submit our offer.

Keep also in mind that purchase price may be only one of few money terms in the agreement. Buyers may ask Seller to pay their closing costs. Buyers may ask for some repairs to be completed even before the inspection is done...In other words, if I represent Seller, I recommend patiently review the whole offer before making the decision if the offer is good or not.

For seller, it may be important Method of buyers Payment....you would think why? Seller will be paid cash after closing and recording anyway...the answer is time...b. If Buyer is applying for conventional mortgage for instance, seller is at assumed risk that buyer either would not get qualification, something can change in buyer's financial ability and the process usually takes about 30 days (that is why houses are usually under contract for about 30 days), some other mortgage make take only several days especially if buyer is already pre-qualified, if the buyer has cash, the closing can happen very quickly, and seller will get money probably within 2-3 days...

Tomorrow...I will review which closing costs buyer and seller usually pays...

EM (Earnest Money)+Loan+Balance in Cash=Offering Price

The right or obligation to do appraisal depends on Financing Condition

If Buyer applies for mortgage, the bank will require to do the appraisal. In my practice, I saw only once when bank waived its right (buyer had very large downpayment). Otherwise, buyer must agree to do the appraisal...It is buyer's obligation...

The Buyer may have a right to choose or not to choose to do the appraisal only if the buyer is a cash buyer.