How to Conduct Real Estate Contract Negotiations?

The point at which your real estate contract negotiations begin is probably the most important in your property search. Savvy individuals already know the importance of getting this stage right and getting the most out of their negotiations. Do you?

It does not matter if you are looking to sell, buy or lease some prime piece of real estate, rest assured that you will need to enter into a real estate contract at some point.

The Real Estate Contract Negotiation Phase

The reason why a lot of real estate contracts end up in disappointment and relationship-ending litigation is because of a poorly negotiated agreement.

A real estate contract is a legally binding agreement between you and that other party and if you are not careful, you will find yourself with the short end of the stick in a relationship that cannot work.

Approaching the Negotiation Phase

Every real estate contract is unique, so each one is crafted to your particular needs and circumstances. However, before the crafting comes the negotiation, and before then comes the search.

Before you even identify any one piece of residential or commercial real estate that you would be interested in, you need to do the following:

• Identify exactly what you want from the transaction. Make sure you have satisfactory answers to how much space you need, where you want the property to be situated, what facilities should be on the property and the highest amount you would be willing to pay or accept if you’re selling.
• Survey possible real estate choices with these factors in mind and critically select those that fall within your specifications. If you are selling, identify property similar to yours and how well they sold.
• Get in touch with an experienced real estate lawyer before establishing a contact so they can do a thorough check on the property to be sure you are on the right track.

Having done these, you are ready to establish contact.

Navigating the Stormy Waters

Important thing to remember before you even walk into the negotiation: Analyze the prospect with your attorney and outline exactly how you want the negotiation to end. With this end in mind,

• Do not be in a rush to accept or reject any part of the other party’s offer. Analyze it carefully with your attorney before giving a response.
• Consider the finances of the deal, how payment will be structured, start dates.
• Look critically at provisions on tenant improvements, neighbor clauses, common area maintenance fees and other use obligations.