5 Common Contract Terms Explained

Real estate contracts are full of unique terms you may not be familiar with. When you’re in the process of buying or selling a home this can be confusing. You’ll have QuinnCorp by your side every step of the way, but before you get started on your real estate journey here are a few definitions to help you along the way.

Here are explanations of 5 common parts of a real estate contract:

Escalation Clause
Whether you are buying or selling you may find yourself presented with an escalation clause. This clause can be added to a contract to help a buyer sweeten the deal. The escalation clause states that a buyer is willing to pay a certain amount over their initial offer. This helps a buyer ensure they get the home they want by outbidding other offers.

If you are a buying a home you will want to talk to your agent about when to use an escalation clause. If you are selling a home, an offer with an escalation clause may be the winner.

Buyer Contingency
As a seller a buyer contingency can be confusing. The buyer contingency requires a buyer to sell their current home before being able to purchase your home. In a bustling real estate market this usually works out well, but in a slow real estate market this can cause long delays in your real estate sale.

Talk with your agent about the pros and cons of accepting an offer with a buyer contingency.

Deadlines
When it comes to real estate contracts many clients are baffled and confused by the long list of deadlines. The deadlines help keep a real estate deal on track. They are assigned to both sellers and buyers. The goal is to stay on track, but in the event it isn’t possible to meet a deadline, you can ask for an amend/extend. This is common in the Denver area currently due to a shortage of appraisers. Here are a few common deadlines you can expect to see on a real estate contract:

• Acceptance Deadline
  
• Sellers Property Disclosure
  
• Loan Application Deadline
  
• Title Deadline
  
• Inspection Deadline
  
• Inspection Objection Deadline
  
• Due Diligence Deadline
  
• Governing Documents Deadline
  
• Appraisal Deadline
  
• Loan Commitment Deadline
  
• Closing Date
  
• Possession Date & Time
  

Counteroffers
A counteroffer is an additional document generally created by the sellers are sent the buyers to adjust terms of the contract. A counteroffer can be for a change in price, change in deadlines or change in terms. This document is generally sent when a seller is wanting to accept a buyer’s offer with a few edits. If you are a buyer and receive a counteroffer from a seller you also have the option to send another counteroffer back. Talk to your agent about best practices in this situation.

Seller Concessions
After the inspection has been completed and you are moving closer to closing it’s common for buyers to request seller concessions. These are usually a monetary amount deducted from the price of the home so the buyer can make necessary updates to their new house. These are often added to the contract through an amend/extend document that is signed by the buyers and sellers once terms are agreed upon. Your agent will walk you through this process.

These common contract terms and additions can sound confusing, but when you work with QuinnCorp you’ll have guidance every step of the way. Get in touch today to get started!