Purchase Price and Earnest Money

Purchase price is simply the amount the buyer has contracted to pay. Simple as that, but contracts are prone to say what is included. Are appliances or certain fixtures part of the price, or do they stay with the seller? Clarify that.

Earnest money is the deposit the buyer pays to show seriousness. In most markets it’s one to three percent of the purchase price. That money is generally held in escrow and subsequently applied to pay the closing costs or down payment. If the buyer cancels for a reason the contract does not cover, the buyer can forfeit this deposit. If the buyer cancels for a reason the contract does cover, the money is usually returned.

Our team at Pryme Point Real Estate walks you through every line item, ensuring you understand exactly what you’re paying for and what protections you have in place.

Contingencies (The Safety Checks)

Contingencies are items that must be met before the sale can be completed. Contingencies are good for buyer and seller but especially for buyers.

• Financing contingency. It says that the buyer is to receive a mortgage on certain terms by a certain date. The buyer can usually walk away if the loan does not approve and receive their earnest money.
• Inspection contingency. The buyer has the house inspected and can ask for repairs or price reduction or can cancel the contract if significant defects are found. The contract normally has a limited inspection and request period for repairs.
• Contingency of appraisal. Lenders will never lend more than an appraisal states. In the event of the appraisal being less than the price to be paid, the buyer and seller need to agree on what to do next, or the buyer can cancel.
• Sale contingency. At times a buyer may need to sell their current home before they can buy. Sellers don’t wish to do this because it creates uncertainty, so offers with this contingency are weaker unless there is a brief timeline to remove the contingency.

Pryme Point Real Estate has extensive experience negotiating contingencies that protect your interests while keeping your offer competitive. We know which contingencies are standard in your market and which ones might weaken your position unnecessarily.

Liquidated Damages

Other contracts state a fixed amount the defaulting party is to pay in the event of default. This prevents protracted fights over the amount lost, but you must comprehend word by word what the clause says before you sign.

Last but not least: contracts exist so that you will be protected when you read and use them correctly. Take the time to discover the key words, ask questions, and get help from those who know the process.

That’s where Pryme Point Real Estate comes in. Our experienced agents don’t just facilitate transactions, we educate and advocate for you every step of the way. From your first offer to the final signature at closing, we ensure you understand every clause, every obligation, and every protection in your contract.