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John M. Stevens' Blog

By John M. Stevens | Agent in Walnut Creek, CA
  • Requesting a price reduction

    Posted Under: Home Buying in Lafayette, Home Selling in Lafayette, Property Q&A in Lafayette  |  July 6, 2012 1:27 PM  |  342 views  |  No comments

    Requesting a price reduction for surprise defects

    REThink Real Estate

    By Tara-Nicholle Nelson, Friday, July 6, 2012.

    Inman News®

    <a href="http://www.shutterstock.com/pic.mhtml?id=104502512">Weather damage</a> image via Shutterstock.Weather damage image via Shutterstock.

    Q: Can I subtract from the offer I've made on a home if the home inspection shows there are some big problems, or do I automatically have to cancel the deal altogether? --Richard N.

    A: When it comes to inspection revelations, "big" is relative, but, like beauty, it's in the eye of the beholder. By that I mean that if you think that a condition problem is too big for you to buy the home on the agreed-upon terms, then it is.

    But it sounds like you're at least willing to consider taking the home anyway, assuming you can get a price reduction. In your situation, deciding that you don't want to take on the condition problems surfaced in inspections without a discount doesn't necessarily have to be a deal-killer.

    Here are the factors that ultimately determine whether an inspection-based price reduction request will kill your deal:

    Article continues below

    1. The contract. Did you agree to an as-is sale? If so, be aware that "as is" doesn't bind you to buying the place, but it is an expression that you and the sellers have agreed that you'll not ask for a price reduction or for them to complete repairs indicated by the inspection(s). That said, it doesn't sound like your intention was to dupe the sellers into taking your offer with the plan to hammer them later for a price reduction or repairs (which, yes, some buyers do).

    If the issues surfaced by the inspection were not obvious or visible to the naked eye, but are also more major than you can afford to take on at the purchase price, it might be the case that the sellers would actually prefer you to work with them on renegotiating the terms of the deal over canceling it outright.

    2. Your priorities and information. You need to sit down with your agent and gather the answers to a number of questions before you proceed:

    --How badly do you want the place?

    --Do you have repair bids -- how much will repairing the issues cost? (Inspection reports can be confusing this way; some things they mention in passing can be costly to fix, while some things they label health and safety hazards are quick and cheap to fix.)

    --Are you willing and able to do the work? (A price reduction doesn't necessarily put the cash in hand for you to pay for home improvements after closing, nor does it mean you'll have the time and patience to manage the work.)

    This information -- and your agent's input and conversations with the listing agent -- should help you formulate a plan of action on what specific price discount you should request from the sellers.

    3. The sellers' position. Ultimately, whether or not your price reduction request will kill your deal depends on what the sellers will agree to. And not it's not always as simple as their greed or hope for the cash -- they might have a mortgage to pay off and limited resources such that the price reduction you request would render the deal a short sale. Further, if the listing is a foreclosure or short sale, the sellers' bank will also have to green-light a change in the purchase price.

    In any event, one of your first items of action should be to get the relevant contractors and repair vendors into the property, show them the inspection report, and obtain actual repair bids. (It's not overkill to obtain two or three bids.) Then, and only then, will you have the information you need to decide whether you truly want and can afford to take on the property and the repairs it needs.

  • Requesting a price reduction

    Posted Under: Home Buying in Oakland, Home Selling in Oakland, Property Q&A in Oakland  |  July 6, 2012 1:26 PM  |  359 views  |  No comments

    Requesting a price reduction for surprise defects

    REThink Real Estate

    By Tara-Nicholle Nelson, Friday, July 6, 2012.

    Inman News®

    <a href="http://www.shutterstock.com/pic.mhtml?id=104502512">Weather damage</a> image via Shutterstock.Weather damage image via Shutterstock.

    Q: Can I subtract from the offer I've made on a home if the home inspection shows there are some big problems, or do I automatically have to cancel the deal altogether? --Richard N.

    A: When it comes to inspection revelations, "big" is relative, but, like beauty, it's in the eye of the beholder. By that I mean that if you think that a condition problem is too big for you to buy the home on the agreed-upon terms, then it is.

    But it sounds like you're at least willing to consider taking the home anyway, assuming you can get a price reduction. In your situation, deciding that you don't want to take on the condition problems surfaced in inspections without a discount doesn't necessarily have to be a deal-killer.

    Here are the factors that ultimately determine whether an inspection-based price reduction request will kill your deal:

    Article continues below

    1. The contract. Did you agree to an as-is sale? If so, be aware that "as is" doesn't bind you to buying the place, but it is an expression that you and the sellers have agreed that you'll not ask for a price reduction or for them to complete repairs indicated by the inspection(s). That said, it doesn't sound like your intention was to dupe the sellers into taking your offer with the plan to hammer them later for a price reduction or repairs (which, yes, some buyers do).

    If the issues surfaced by the inspection were not obvious or visible to the naked eye, but are also more major than you can afford to take on at the purchase price, it might be the case that the sellers would actually prefer you to work with them on renegotiating the terms of the deal over canceling it outright.

    2. Your priorities and information. You need to sit down with your agent and gather the answers to a number of questions before you proceed:

    --How badly do you want the place?

    --Do you have repair bids -- how much will repairing the issues cost? (Inspection reports can be confusing this way; some things they mention in passing can be costly to fix, while some things they label health and safety hazards are quick and cheap to fix.)

    --Are you willing and able to do the work? (A price reduction doesn't necessarily put the cash in hand for you to pay for home improvements after closing, nor does it mean you'll have the time and patience to manage the work.)

    This information -- and your agent's input and conversations with the listing agent -- should help you formulate a plan of action on what specific price discount you should request from the sellers.

    3. The sellers' position. Ultimately, whether or not your price reduction request will kill your deal depends on what the sellers will agree to. And not it's not always as simple as their greed or hope for the cash -- they might have a mortgage to pay off and limited resources such that the price reduction you request would render the deal a short sale. Further, if the listing is a foreclosure or short sale, the sellers' bank will also have to green-light a change in the purchase price.

    In any event, one of your first items of action should be to get the relevant contractors and repair vendors into the property, show them the inspection report, and obtain actual repair bids. (It's not overkill to obtain two or three bids.) Then, and only then, will you have the information you need to decide whether you truly want and can afford to take on the property and the repairs it needs.

  • Part 2 "Your needs always come first" coming soon

    Posted Under: Home Buying in Oakland, In My Neighborhood in Oakland, Property Q&A in Oakland  |  June 3, 2012 4:33 PM  |  246 views  |  No comments
  • Part 2 "Your needs always come first" coming soon

    Posted Under: Home Buying in Orinda, In My Neighborhood in Orinda, Property Q&A in Orinda  |  June 3, 2012 4:32 PM  |  328 views  |  No comments


    Part 2 of my ongoing real estate series "Your needs always come first" coming soon.
  • Part 2 "Your needs always come first" coming soon

    Posted Under: Market Conditions in Lafayette, In My Neighborhood in Lafayette, Property Q&A in Lafayette  |  June 3, 2012 4:30 PM  |  235 views  |  No comments




    Part 2 of my ongoing real estate series"Your neeeds always come first" is coming soon..
  • May Real Estate Headlines

    Posted Under: Home Buying in Lafayette, Home Selling in Lafayette, Property Q&A in Lafayette  |  May 2, 2012 2:25 PM  |  249 views  |  No comments

    April just flew by faster than teen trying to get home before curfew. Seriously, where did that month go? May is ready to break through and bring warmer weather, playoff hockey & basketball and a greater interest in the real estate market. Here are some headlines to quench your real estate thirst:

    • This is a pretty cool looking cabin/backyard office/guest house/envirosponsible shelter called, The Crib.
  • Holiday Tips for Home Buyer

    Posted Under: General Area in Lafayette, Home Buying in Lafayette, Financing in Lafayette, Property Q&A in Lafayette  |  December 6, 2011 10:17 PM  |  654 views  |  No comments

    Do your homework in advance. Deciding on the type of home you want, determining a budget, and even securing a home loan are all steps that will help make you ready to answer when opportunity knocks in the last few weeks of December. You'll have your pick of properties without having to drag all the paperwork through your holiday celebrations.
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