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Intermediate terms

Essential Offer Negotiation Terms

This curated collection includes key terms that might be helpful when exploring the real estate offer and acceptance process. It covers the critical steps from submitting an offer to getting it accepted, including negotiation tactics and important contractual elements. These terms were selected based on common questions and areas where investors often need clarity.

Learning Path

1

Counteroffer

A counteroffer is a response to an initial real estate offer that proposes different terms, effectively rejecting the original offer and creating a new one to continue negotiations.

Intermediate13-14 min
2

Financing Contingency

A financing contingency is a clause in a real estate purchase agreement that makes the sale conditional upon the buyer securing a mortgage loan, protecting the buyer's earnest money if financing falls through.

Intermediate5 min
3

Offer Strategy

An offer strategy is a comprehensive plan developed by a real estate buyer to present a purchase offer, encompassing price, contingencies, and terms tailored to market conditions and seller motivations.

Intermediate5 min
4

Acceptance

Acceptance in real estate is the unconditional agreement by a buyer or seller to the exact terms of an offer, forming a legally binding contract for a property transaction.

Beginner2-3 min
5

Purchase Agreement

A Purchase Agreement is a legally binding contract that outlines the terms and conditions of a real estate transaction, formalizing the buyer's offer and the seller's acceptance.

Intermediate12-13 min
6

Appraisal Contingency

An appraisal contingency is a clause in a real estate purchase agreement that allows the buyer to back out of the deal or renegotiate if the property's appraised value is less than the agreed-upon purchase price. It protects buyers from overpaying and ensures lenders do not finance more than a property is worth.

Intermediate5 min
7

Due Diligence Period

The Due Diligence Period is a contractual timeframe in real estate during which a buyer thoroughly investigates a property's condition, financials, and legal standing to make an informed purchase decision.

Intermediate13-16 min
8

Comparative Market Analysis

A Comparative Market Analysis (CMA) is an informal estimate of a property's value based on recently sold, active, and expired listings in the same area, used by real estate professionals to help buyers and sellers determine a competitive price.

Intermediate15-18 min
9

Negotiation

Negotiation in real estate is the strategic process of discussing and agreeing upon the terms and conditions of a property transaction, aiming to achieve mutually beneficial outcomes for all parties involved.

Intermediate14-15 min
10

Property Inspection

A property inspection is a visual examination of a property's condition by a qualified professional to identify defects, safety hazards, and maintenance needs before purchase.

Intermediate13-14 min
11

Escrow

A legal arrangement where a neutral third party holds funds and documents until specific conditions of a contract are met, ensuring a secure and fair transaction, especially in real estate.

Intermediate15-18 min
12

Contingency Clause

A contingency clause in a real estate contract is a condition that must be met for the agreement to become legally binding, providing an escape route if specified terms are not satisfied.

Intermediate13-14 min
13

Closing Date

The Closing Date is the scheduled day when a real estate transaction is finalized, ownership officially transfers from seller to buyer, and all financial and legal requirements are met.

Beginner2 min
14

Appraisal

An appraisal is an unbiased, professional opinion of a property's market value, conducted by a licensed appraiser, primarily used for lending, buying, and selling decisions.

Intermediate14-15 min
15

Market Value

Market value in real estate is the most probable price a property should bring in a competitive and open market under all conditions requisite to a fair sale, with the buyer and seller acting prudently, knowledgeably, and typically uninfluenced by undue stimulus.

Beginner15-18 min
16

Highest and Best Offer

A highest and best offer is a request from a seller or their agent for all interested buyers to submit their strongest financial and contractual proposals by a specific deadline, typically in a competitive market.

Intermediate5 min
17

Multiple Offers

Multiple offers describe a real estate scenario where a property receives purchase proposals from more than one prospective buyer, often simultaneously, indicating high demand and competition.

Intermediate5 min
18

Earnest Money

Earnest money is a deposit made by a buyer to a seller, held in escrow, demonstrating the buyer's serious intent to purchase a property and serving as security against buyer default.

Intermediate13-14 min
19

Inspection Contingency

An inspection contingency is a clause in a real estate purchase agreement that allows the buyer to conduct a professional home inspection and, based on the findings, negotiate repairs, request credits, or withdraw from the contract without losing their earnest money deposit.

Intermediate5 min