The Purchase Contract (along with all Counteroffers and Addenda) sets the rules of the game. It outlines the terms of the deal, which party is responsible for what, when the deadlines are, and what to do if the other party doesn't comply. What it doesn't do, unfortunately, is tell each party what the other party is thinking.
I had a transaction recently where I represented the Seller. We came together on a selling strategy, and marketed the property as hard as possible. After a couple of months we had an offer on the table which was right in line with what we expected to receive. Then it got interesting.
The Buyer happened to be very particular, and very adamant about almost every detail. It took 3 Counter Offers before we came to terms. The inspection process and subsequent re-negotiations were more challenging than usual. We had decided that we were probably giving away a few hundred dollars more than we would have liked, but that's a lot less than the $1,300 monthly payment on a vacant house! Then came the final hurdle.
The Buyer asked us, 2 days before Close of Escrow, to address an item which we had agreed to do in the contract. Unfortunately, this was the first time they had asked, and the contract clearly stated that they were supposed to ask for this during their inspection period. This created a potential impasse: we had agreed to do it, but since we were not given notice, we were contractually off the hook. But what does that really mean?
If we refused to address this item, and we know how particular this Buyer had been, there was a very real possibility that the Buyer would walk away from the deal – we would have been right, but we ultimately would have lost. Instead, we agreed to spend a few hours of labor & a couple hundred dollars that we shouldn't have had to spend, in exchange for knowing we would close within 36 hours. Given the market we're in and the rest of the story, we probably saved several thousand dollars by spending the extra couple hundred.
On a personal note, I want to give many thanks to my client (you know who you are!) for letting cooler heads prevail & looking at the big picture. In the end, we wanted to sell a house, and the "principle of it" only goes so far!
- Chris Butterworth