Home Buying in Monte Rio>Question Details

RF, Home Buyer in Rohnert Park, CA

What's the standard procedure for negotiating purchase agreement?

Asked by RF, Rohnert Park, CA Wed Jan 21, 2009

I have gone through the purchase agreement and found certain areas I would like reworded. How does one normally propose these revisions to seller? Can I send a document that says which paragraph I would like changed? Should I create an addendum?

This purchase is REO, I went through this agreement with a fine-tooth comb and I have to say, they really want my deposit regardless of what happens! Is this normal?

Most of the contingencies I want added are based on financing, inspection and taxes. Is there something else I should look out for? There are a decent amount of paragraphs I would like to modify; although, most are just a sentence here or there. How much do banks normally budge? I'm not asking for the closing cost to be paid, I just want to be sure the contract will be void and I get my deposit if the lender doesn't pull through or inspection shows something seriously wrong.

Help the community by answering this question:


If you are going to change up the legal wording of your states pre-printed standard purchase agreement, You really need a real estate attorney

If you are simply re-wording the "filled in " or "hand written" on the pre-printed standard purchase agreement, have a licensed realtor help you, and explain
0 votes Thank Flag Link Wed Jan 21, 2009
All of the previous answerers have covered most of what I would say regarding this situation. One thing I would watch out for and really read on the Bank's contract is regarding contingency removals. Quite a few of the REO transactions that I have been involved with had the following similarity. The contingency removals were passive and thus the time frames needed to be even more carefully watched and dealt with in order to protect the buyers deposit funds.

I still highly recommend that any buyer trying to negotiate a transaction of this type be represented by a Buyers Realtor who is familiar with REO transactions in the area.

Lynn Bowen
Domaine Real Estate
0 votes Thank Flag Link Wed Jan 21, 2009
Even though I write offers for clients to purchase REO properties on the standard CAR (California Association of Realtors) contract, each bank has its own set of addenda which essentially modify some of the terms involved. Even if the price and basic purchase terms are acceptable to you the buyer you are not likely to make any changes to the bank's boilerplate or items such as mediation and arbitration. Most addenda do acknowledge the liquidated damages provision which limits a buyers exposure to his deposit of no more than 3% of the purchase price, and has procedures for the buyer to regain his deposit absent a default.

In most cases, the buyer has had the opportunity to conduct inspections and gain loan approval plus the chance to cancel an escrow if they are not satisfied or the loan isn't approved. As long as a buyer is within specified contingency time frames, there are generally provisions for the deposit to be released.

If the buyer defaults AFTER removing contingencies then most of the addenda I have seen make it easier for the bank to retain the earnest money deposit wthout requiring any further signatures as would be customary in a "normal" deal.

Each bank has its own procedures and addenda and your agent should be able to guide you in this matter. In many negotiations between buyer and seller it is not unreasonable to negotiate terms, but I wouldn't hold my breath trying to substantially reword the boilerplate purchase agreement of a lender. Below, Rick makes an important point about the roles of realtors and the roles of attorneys in these matters which very much applies in every transaction. With REO's however, the degree to which minor terms that might be negotiable by you in a regular sale, is slim to none. It is just not practical for the bank and therefore not likely practical for you.
0 votes Thank Flag Link Wed Jan 21, 2009
These documents are created and approved by attorneys for use by real estate professionals. They are intended to be boilerplate forms that require only for blanks to be filled in.

Since realtors are normally not attorneys and therefore are not licensed to practice law, changing wording for a legal document could be considered practicing law without a license....a very serious offense. Agents should think long and hard about "wordsmithing" commonly accepted legal documents. There is so much to lose.........

Doing an addendum is one thing but crossing out paragraphs and changing wording needs to be done only after consulting an attorney.
0 votes Thank Flag Link Wed Jan 21, 2009
Where is your buyers agent assist you? You would need to include an addendum to purchase sales contract.
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Wed Jan 21, 2009
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