Buying a home isn’t something where you, as the buyer, are going to go to the seller directly and tell them what you want to pay, hand them a cheque, and you’re done. This isn’t quite like buying a car. A Realtor is going to be your go to person from the initial search for a house — until the transaction closes and you get the keys.
What is a Buyer Covenant?
A buyer covenant is when the Realtor ensures that the buyer is capable of completing the deal, meaning affording the home and having everything completed by the closing date. There should be no setbacks and no surprises. Many go into it with pre-approval of a mortgage amount, but then there are ones who don’t and it’s up to the Realtor to ensure that everything will work prior to them having to withdraw and cause setbacks.
How Much is Your House Worth
Of course, the seller will think the house is worth a fortune, but based on current market trends and the neighborhood and environment, that can also dictate the price of the home. If the home is priced well above market value or well above what a close neighbours home has recently sold for, it will have a difficult time selling. At that point, the Realtor buying will most likely put in a lower offer, with respect to trends, and negotiate until there is either a deal brokered or a rejection.
Pre-Approval Isn’t a Guarantee
Although a buyer may be approved for a certain mortgage amount, it may come with certain conditions, as in the home has to be appraised and they are only allowed some percentage over what it’s worth, etc. This might cause the offer to fall through.
Home Inspections Can Affect the Negotiations
Buyers will sometimes have the home inspected (sometimes this is a requirement) but it’s to ensure that they are aware of any problems with the home – either structural or mechanical, etc. They can then take that information from the inspector and negotiate that into the contract potentially either lowering the price or having the work completed by licensed professionals prior to actually closing.
Generally, a down payment or deposit is required. Depending on the terms of the mortgage, and what was approved, and if there were any special programs being used. But this is a deposit that goes towards the actual price of the home and comes off the mortgage price at the end.
Everything has been satisfied, papers signed, seller is moved out, and the keys are given to the buyers! Sometimes sellers have a certain time they are looking to get out by, they have a new home or they have to be somewhere else, so when a person/people can meet that closing date, it makes the deal easier for all parties. This is the end, this is when the process is done and everyone has what they want.
If you have any more questions about the home buying process or negotiations, please don’t hesitate to call me at 519-624-5555 or e-mail firstname.lastname@example.org