Real estate offer contract (sales, mortgage, broker)

[qwertyfx]

I'm a first time homebuyer.

I bid purchase price on a home recently and I guess another person did as well. The seller (a real estate agent themselves) wants everyone's best and final offer in a few days. I asked my realtor to put in an appraisal contingency clause as well a few more clauses with my final bid. He said I would need a real estate lawyer to draft the document and the attorney has a 5 day period after the seller signs the offer to add those things and review the contract.

That doesn't make sense to me to have an attorney add contingencies AFTER the seller accepts and signs my offer. Once it's signed, we're both bound right? What's the deal?

[nikitakolata]

Originally Posted by qwertyfx

I'm a first time homebuyer.

I bid purchase price on a home recently and I guess another person did as well. The seller (a real estate agent themselves) wants everyone's best and final offer in a few days. I asked my realtor to put in an appraisal contingency clause as well a few more clauses with my final bid. He said I would need a real estate lawyer to draft the document and the attorney has a 5 day period after the seller signs the offer to add those things and review the contract.

That doesn't make sense to me to have an attorney add contingencies AFTER the seller accepts and signs my offer. Once it's signed, we're both bound right? What's the deal?

Yes, changes to the contract can be made during the attorney review. However, I would not recommend adding major contingencies (inspection, appraisal, etc.) in that period because the contingencies, or lack thereof, often contribute to which offer is selected in a multiple offer situation.

If you need financing for the house, then an appraisal is somewhat built in to the mortgage contingency because you won't be able to get financing if the house does not appraise. If you are paying cash, then I can understand wanting to add an appraisal contingency. I would think you could simply write that the contract is contingent on an appraisal, paid by the buyer, for at least the purchase price in an addendum and reference it in paragraph 30. That would probably suffice at least until the attorney review period, where the contingency could be beefed up by your attorney. I am not an attorney, but I am a managing broker and that's what I would do in this scenario to alert the sellers to the existance of the contingency.

Unless you want some unusual contingencies added I don't see why your agent is having an issue. Of course, it could be that they simply do not understand the contract, which is an issue with many agents I have encountered. Many agents are sales people, not lawyers, and they really are not very comfortable with the contracts in general.