How to Negotiate at Closing
Although many basic issues associated with the sale of real estate are resolved before the closing, other matters remain to be resolved. Consequently, you need to prepare yourself to negotiate on these matters during the closing meeting. One issue is which party is responsible for paying the closing costs and fees associated with the sales transaction.
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Instructions
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Determine when the buyer will assume responsibility for paying property taxes associated with the real estate. The typical arrangement is that the seller is responsible for property taxes up to the date of closing. The buyer is responsible for the property taxes for the remainder of the tax year.
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Establish which party is to pay various inspection fees. Typical inspections that occur prior to a real estate closing are structural, electrical and plumbing. There is no hard and fast rule associated with whether the seller or buyer pays these expenses. In most cases, you are best served having the other party pay these fees. However, these types of fees normally are not extensive. Therefore, they provide valuable negotiating points if there is some other benefit you desire to obtain through negotiating at a closing.
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Designate whether the seller or buyer pays for any independent appraisal of the property. The reality is that typically, the seller obtains and pays for an appraisal before putting the property on the market. The buyer likely requests a fresh appraisal before the closing. Normally, the buyer is deemed responsible for the cost of this appraisal.
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Allocate financial responsibility for any defects found in the premises during the inspections. The key here for the buyer is to get the amount estimated to repair these defects deducted from the overall purchase price.
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Establish a date on which the seller vacates the premises. A key point of negotiation is determining when the premises are available for occupancy by the buyer.
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Tips & Warnings
In some cases, a real estate closing is quite complex. Therefore, if you have questions and concerns regarding matters relating to the real estate transaction, consider engaging the services of a qualified and experienced real estate attorney. There are directories of lawyers in different practice areas available through state and local bar associations. Contact information for these groups is available through the American Bar Association.
