By DAVID HOUCK
Qualifying Broker
Atomic Realty, LLC

Generally, there are three primary contracts used in a real estate transaction:

• • • • • Listing Agreement
        • Buyer’s Brokerage Agreement
        • Purchase Agreement – This contract establishes the agreed-upon price and terms of sale between the Buyer and the Seller. 

All terms in these contracts are negotiable, and both buyers and sellers should carefully review and negotiate them before signing.

The Purchase Agreement

The purchase agreement is a legally binding contract between the Buyer and the Seller. It begins as an offer and becomes a fully executed contract once it is signed by both parties. This agreement outlines essential details of the transaction, including the purchase price, financing, inspections and other contingencies, allocation of closing costs, and required timelines.

Price

The Buyer submits an offer that includes a proposed purchase price and terms. If the Seller finds the offer unacceptable, they may respond with a counteroffer. This process may continue back and forth until both parties reach mutually acceptable terms or decide they cannot come to an agreement, in which case the offer terminates.

Contingencies

In real estate, a contingency is a condition that must be satisfied for the transaction to proceed to closing. Contingencies protect the Buyer—and sometimes the Seller—by allowing a party to withdraw from the contract without penalty if certain conditions are not met.
Common contingencies include home inspections, financing approval, appraisal results, and the sale of the Buyer’s existing home. A property listed as “contingent” has an accepted offer but is not considered sold until all contingencies have been fulfilled.

Costs

All costs outlined in the purchase agreement are negotiable. The offer to purchase specifies which party is responsible for each expense. Negotiable items may include brokerage fees paid by the Seller to the Buyer’s brokerage, repairs or carpet allowances, responsibility for the ILR (survey), and various closing costs such as title insurance.

Timelines

The purchase agreement establishes important deadlines that both the Buyer and Seller must meet. These include timelines for inspections and objections, appraisals, financing and insurance approval, the closing date, and the final three-day walk-through to confirm the property is in substantially the same condition as when the offer was accepted.

Working Toward More Affordable Real Estate Transactions

In today’s market of higher interest rates and rising housing costs, thoughtful broker negotiation benefits everyone. A well-negotiated brokerage contract can lower transaction costs, increase sellers’ net proceeds, and improve buyers’ access to homeownership.

David Houck is the Qualifying Broker of Atomic Realty. With over 40 years of real estate experience and an educational background in mathematics, physics, and law, David serves on the New Mexico Association of Realtors Forms Committee, where he helps create clear, consumer-friendly real estate contracts.

If you have questions about timing or negotiation strategy, feel free to call or email Kate or David. Additional resources and information are available at www.AtomicRealty.net.