In this episode of Get Real Wealthy Season 2, Quentin talks about negotiating your purchase and sale agreement.
Quentin says that if you’re working with a realtor, they’ll help you with the purchase and sale agreement. However, if you’re going to work on a private sale, there are some typical clauses that you should include. The first would be a financing clause. If it’s a single-family home you may have five or 10 days financing clause in order to submit your property to your bank. Then, an inspection clause where you hire a third-party inspector to come in and evaluate the property. A third clause is an ability for both of you to review the purchase and sale agreement with a lawyer, so that it is agreeable both and correct.
The other thing that you are going to want to negotiate in a purchase and sale agreement is the deposit structure. You might also include some broad terms about fixtures as well. Another thing is the appliances. You want to ensure that the appliances that are there are the ones that you’re buying, but they’re not switching them out with something else. Quentin adds that if you are just starting out, make sure that you work with an experienced realtor first and also have a lawyer go through the agreement before signing it.
Furthermore, he says that there are a lot of different ways that you can differentiate yourself in an environment where you have a tight market and you need to give firm offers. One thing would be to include a personal letter to the seller, explaining who you are and the property, and appealing to them emotionally. In conclusion, he says that “You want to be careful. I know you want to buy the property, but you also don’t want to overpay. So, you want to not get emotional about winning the deal, but making sure that it makes sense to you financially and that the investment property still cash flows.”
Quentin D’Souza is the Chief Education Officer of the Durham Real Estate Investor Club. Author of The Action Taker's Real Estate Investing Planner, The Property Management Toolbox: A How-To Guide for Ontario Real Estate Investors and Landlords, The Filling Vacancies Toolbox: A Step-By-Step Guide for Ontario Real Estate Investors and Landlords for Renting Out Residential Real Estate, and The Ultimate Wealth Strategy: Your Complete Guide to Buying, Fixing, Refinancing, and Renting Real Estate.