Generally, there’s a basic set of steps to follow when selling or purchasing a home. Step one is to negotiate a sales price that both the buyer and seller can agree upon. Step two is to hire a licensed home inspector to go through the house and check the condition of the property. Step three, the lawyers for the buyer and seller prepare contracts for both the buyer and seller to sign, and then implement the contract details.
I stop at this last step since “implement contract details” sounds very simple when written in this manner but should really be discussed more thoroughly. What contract details are we talking about other than the sales price already agreed upon by the buyer and seller, and why do we need to add them in?
We know that part of the details is the mortgage contingency and how it is outlined in the contract—i.e., the amount of the mortgage, the time given in the contract to obtain said mortgage, as well as the type of mortgage that the contract allows. Yes, this is an integral part of the contract, but what of the other contract issues that might be more individual by nature?
It is not unusual to see items beyond these basic set of steps as an addendum to the contract. There are many details that might be added, such as extra work or repairs that the seller might be responsible for as part of the negotiation, or personal items that may be included in the sale price beyond the sale of the house itself.
Since many of these extras are not typically in a sales contract, what would be the best way of working with these addendums so as to ensure their smooth implementation? And if they have already been agreed upon between the buyer and the seller, why do we need to write them in detail into the sales contract?
Unfortunately, there are times when a buyer and seller negotiate a series of additional details to be taken care of by the seller prior to closing, or the seller agrees to include some additional items into the already agreed upon sales price, and the parties leave it at a handshake instead of creating a written document specifying the details of what was actually agreed upon. Then, at the time of closing, both seller and buyer have different recollections on what was agreed upon, and all sorts of misunderstandings ensue—mostly “he said, she said”—because there is nothing written down detailing the agreed-upon addendum.
Miscommunication of this kind results in lots of fighting, no clear resolution of the issues, and deals falling apart or needing to be renegotiated in order to achieve closure. The parties usually feel that their initial agreements weren’t honored or that they were taken advantage of. For this reason, I firmly recommend when negotiating issues beyond the basic sales price not to decide important issues with a handshake because everyone is a nice guy. Two parties may interpret an issue differently and the only way for everyone to be on the same page is if it is written down in detail and put into the contract. If it’s not in the contract, it’s as if it was never discussed.
Putting things down in written detail is not offending anyone. It is actually keeping everyone on good terms and guaranteeing that handshake at closing.
Anessa Cohen lives in Cedarhurst and is a licensed real-estate broker (Anessa V Cohen Realty) and licensed N.Y.S. mortgage originator with over 20 years of experience offering full-service residential, commercial, and management real-estate services as well as mortgage services. She can be reached at 516-569-5007 or via her website, www.AVCrealty.com. Readers are encouraged to send questions or comments to anessa@AVCrealty.com. Read more of Anessa Cohen’s articles at 5TJT.com.
