Reasonable seller terms?

3 Replies

Hey Everyone, My team and I are in the negotiation stages of a 126 unit apartment deal and the seller is asking for the following conditions: 1. The purchase price is to be firm as the seller is not interested in re-trading the deal in the future. 2. The seller would like to add a 21-day financing contingency in the LOI. 3. Closing on or ‪before December 14, 2018‬. 4. The buyer is responsible for any title insurance. Are these reasonable requests and can they be met for a property of this size? Any and all advice is greatly appreciated. Thanks!

Yes, these terms are reasonable, but only if your'e prepared. 

A lot of markets don't even have a financing contingency right now. Even with a 21 day contingency, you likely won't have a commitment to close from the lender in time. I recommend having your financing lined up before the PSA. If you don't already have a relationship with a lender, start working with a mortgage broker. They'll be able to tell you which lenders they know will close. Think of their fee as extra insurance that the deal will close. 

It's a seller's market and they can dictate terms right now. Title insurance by the buyer isn't that surprising. 

60+ days to close is nice. I would try to get an optional 15 day extension with additional EMD, if possible.

I agree these seem reasonable. If you get this under contract ASAP, have all of your ducks in a row for the lenders (borrower PFS', property financials, etc.) and make a lender selection quickly, I don't see why you couldn't close by the hard date. As Sam mentioned, you can always buy time, whether that's via seller extensions with EMD, or lender expedition fees.

Regarding Title, make sure if you're paying for it, you're able to use your own title company, not one chosen by the seller.