Episode 11: Contract Negotiations Process
In this episode of Rock the Closing, real estate attorneys Dalia and Orsolya guide you through the intricacies of the contract negotiation process. From the initial deal sheet to the final signing, they explain how negotiations unfold, who is responsible for preparing the contract, and the key differences between contracts and riders. You'll also learn about the typical timeline for negotiations, the modern convenience of electronic signatures, and the dynamics of negotiating with various parties. Tune in to discover real-life stories and get valuable insights into ensuring a smooth contract negotiation process.
IN THIS EPISODE, YOU’LL LEARN:
📝 Where It All Starts
The process begins with the deal sheet, which includes basic details about the property, the involved parties, and their attorneys. This is followed by an initial courtesy email to introduce the negotiating teams.
📅 When to Start Negotiations
Negotiations kick off as soon as the initial contract draft is prepared. This is the first critical step before any financial transactions occur, ensuring both parties agree on the deal's terms.
📑 Who Prepares the Contract
The seller’s attorney drafts the initial contract based on the deal sheet. This draft is then reviewed and negotiated by both parties' attorneys before any formal agreement is reached.
🔄 Contracts vs. Riders
The main contract includes the basic terms of the deal, while a rider adds additional terms specific to the transaction. Riders might address unique conditions like inspection waivers, post-occupancy agreements, or specific inclusions or exclusions.
⏳ How Long Does Negotiation Take?
Typically, it takes about a week to negotiate and finalize the contract. This timeline can vary depending on factors like due diligence, inspection results, and how quickly attorneys respond.
✍️ Signing the Contract
Nowadays, most contracts are signed electronically, simplifying the process compared to the past when physical signatures were required. This modern approach makes it easier for clients to finalize agreements regardless of their locations.
🤝 Negotiation Dynamics
Negotiations are generally amicable, though challenges can arise, such as dealing with difficult attorneys or slow responses. Despite these hurdles, most negotiations are resolved professionally.
📚 Real-Life Stories
Dalia’s Story: A client with limited experience with technology required a creative approach to signing, involving fax machines and scheduled phone calls.
Orsolya’s Story: A client with very specific preferences led to multiple rounds of negotiations with different attorneys before reaching a mutually satisfactory agreement.
Disclaimer:
Thank you for tuning in to RTC! This podcast is hosted by real estate attorneys, who offer valuable insights. Please remember that the content is for educational purposes only and does not constitute legal advice. Always consult a qualified professional before making any decisions. This podcast is copyrighted by Rock the Closing, and any reproduction, syndication, or rebroadcasting of the content requires written permission.
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Music Credits
Music by SoundHills, Beautiful Minds. Find more at https://protunes.net/
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Disclaimer:
Thank you for tuning in to RTC! This podcast is hosted by real estate attorneys, who offer valuable insights. Please remember that the content is for educational purposes only and does not constitute legal advice. Always consult a qualified professional before making any decisions. This podcast is copyrighted by Rock the Closing, and any reproduction, syndication, or rebroadcasting of the content requires written permission.
