Three Ways Contract Timelines Can Save You Money Upfront
by Erin Salem
on Wednesday, April 11th, 2018 at 12:08pm.
There are hundreds of intricate details that go in to buying a home. But did you know that the timing of your purchase agreement can play a huge role in how much money it costs you to purchase a home? An experienced Realtor can (and should) help you to write a contract according to the timeline that saves you the most money upfront.
Here are three examples of how timelines can play into your purchase, and how your Realtor can step in to advocate for you:
1. Buyers must pay for the appraisal of the home they want to buy (meaning a determination of how much the home is actually worth). If the home does not appraise for the agreed-upon sales price, the buyer has the option of removing their purchase offer. BUT! The buyer has already agreed to put a certain amount of promised-money into escrow and that money is called a binder. If they choose not to purchase the home after it doesn't appraise, they are not guarenteed that the binder will be returned to them! An experienced Realtor can help you by adjusting timelines that reduce the risk of losing your binder if the home doesn't appraise.
2. Your Realtor can advocate for your investments throughout the home purchase to be deducted from the overall closing costs, or even paid by the seller, saving buyers cash upfront. Every sale does not call for this request, which is why it's important that your Realtor have enough experience to know when it's appropriate and when it isn't.
3. Closing dates are incredibly important, and always negotiable. Realtor's can help you understand how the time of month during which you close will affect your closing costs and first mortgage payment. While a first-of-the-month closing date might be beneficial for one buyer, that same closing date could cost a different buyer more depending on the type of loan.
Here's a short video with Howard Flaschen and Alan Levinson of Round Table Realty explaining these ideas in a bit more detail: