Licensed Associate Broker
Accredited Buyer Representative
William Raveis Legends Realty Group
Old homes have old systems which of course you knew going into the purchase.contract. Things like the inspector describing the wiring as old shouldn't be a surprise to you. Things like upgrading the cosmetics fall into the "you knew this going into the contract" too.
Inspections are primarily for you to discover and deal immediately with health and safety issues like the previously mention gas leak.
I concur with your agent. You may not like what I'm about to say but get real about your limitations and buy a home you can afford. Don't waste your time, your agent's time, the listing agent's time, and seller's time looking at older run down homes with the intent of having the seller upgrade it for you. Quit whining and get real in the market place.
That being said, I'm sure that your agent is just using his experience to help guide you with the negotiations. It's true, many Sellers will not do as much work as you're describing above. I need to ask, did you and your agent discuss how much work the home might need before you put an offer in on it? Did you discuss what the home is worth with the work completed? Maybe this home is priced as low as it is due to the work that it needs, and if that's the case, you can't expect the Sellers to do the work after they've already reduced the price so another Buyer can do the work.
It's time to sit down with your Realtor and have an open and honest conversation. Get all the cards out on the table as to your expectations and his. Maybe this home is not the one for you. Maybe this Realtor is not the one for you. Either way, it's time for you to make some hard decisions SOON.
My home is old, historic and beautiful . But there are a lot of problems with older homes and I don't know any out of the 70 in this historic district that have building permits for most work. We had our own inspection before listing the house and we repaired everything on the list and a few more items not found on our inspection. We gave all the information including costs for our repairs to the buyers agent. They chose to have their own inspection and I would have done the same thing. Now, I have taken my home off the market waiting for escrow to close. There were multiple offers coming in the day of the Open House and at least two were full price. The home is not underpriced and its at the top of the market valuation. Probably it just sqeaked by the appraisal. But it has added value in historic property tax reductions and it is very desirable. I agreed to accept the buyers full offer the same day with the understanding we were not going forward with the multiple offers or backup offers at their request because likely the prices would have gone higher and they did not want a bidding war. They wrote a long letter saying how much they loved the home and had watched it and wanted it so they knew the home and had the opportunity to see for themselves-- It's old !
Now I have spent several thousand dollars more in completing repairs, termite work etc. and if this falls apart I would suffer putting it back on the market and have to start all over.
I believe the inspection is for the purpose of the buyer being advised of anything we did not disclose, could not be seen during home visits, or that is a safety hazard or health concern. Other than that, it is what it is.......an old house not a new house, clearly difficult to maintain, available for anyone to inspect and I don't look at the negotiation as opening now on price. Price was negotiated when the buyers signed an offer to pay full list. Anything less than that will have to be strictly what is required to be repaired by the law in CA. A long laundry list would frankly make me very annoyed and I would tell my agent to go bring back some of the other interested parties.
Seller in San Diego
thanks all for your help :)
The seller is not obligated to make any repairs unless stated in your initial offer. The seller can either agree to make repairs or not; or you can accept the house with repairs as needed.
1) Inspections allow the Buyer to check out the home for health/safety issues and deferred maintenance that needs to be addressed.
2) Inspections are not an "opportunity to reduce the price of the home."
If the offer is full price and the Inspection Objection is reasonable (assuming the home isn't falling apart) then more often than not, the deal will stay together.
The final consulting advice I offer my Buyers is that the Inspection Objection is the time to "pick your battles." I have Buyers focus on priority items and list them out from 1-10 (hopefully no more than that) in the order of importance. Then I have the Buyers pick out the "health/safety issues" like old HVAC units, potential water leaks, critters/holes in the attic spaces, etc. Things like bathroom caulking, sloping landscaping from the foundation (those items that ALWAYS show up on a report) and not necessarily health/safety issues and should be well thought out before putting on the Inspection Objection. If the Inspection Objection is an attempt to lower the price of the home by a dollar amount, the deal will probably fall apart. If it's a "got to have it house" then be prepared to fix some things after move in. Respectfully submitted,
I would make a list of your deal breaker items and see how far you can get with the seller in agreeing to make some repairs.
Best of luck to you!
YOUR CASTLE REAL ESTATE
Thanks for responding. It is good to know the outcomes of questions asked here on Trulia. Although it is easy to say; try not to get too attached to a home before getting all the facts to determine if it is your best interest to move forward. Also, even with the low inventory there will always be another home that will work as well or better than the one you're considering. Good success with your purchase.
I do appreciate your engaging responses, Mw! I read a lot of these strings, and few questioners follow up with a response. We rarely hear the outcome. So thanks for coming back.
My thoughts are of the more general nature. When buying any home, you should bring a strategy to any negotiation. If a buyer doesn't give themselves some wiggle room on a purchase especially for an older home, they might have to accept that many - if not most - of the smaller issues will not be addressed.
I'm glad you will be able to get the items addressed that should be addressed.
Apparently, you recognize that you're getting a great home - albeit a little beat up - at a good price. As you gradually get your new home is shape with all that work, you will appreciate it more.
I'm glad it will work out for you. Congratulations!
You probably should not worry about what anyone else says concerning the seller's willingness to negotiate a deal that YOU can live with. In negotiating situations, we rarely know what the other side will do.
To a large extent this is all about numbers. What is the house worth in the marketplace given its current condition? Financially speaking, how much work does the house need? How much are you willing to put into the house to bring it up to an acceptable condition? What will the house be worth when the work is complete? Could you find another satisfactory home that will cost less when you add up the purchase price and the cost of improvements? Then, when you have the answers to these questions, ask yourself if making the improvements is worth your time and effort. (BTW: none of this means you should not listen to the wisdom of other people. But in the end you need to draw your own conclusions and make your own decisions based on the best information available and what is best for you.)
I suggest you keep your considerations in the realm of logic. Put emotion aside. In all negotiating situations, you should set your own bottom line. If an appropriate resolution cannot be accomplished, then you should be prepared to walk. And, as I mentioned above. don't worry about what anyone else thinks or says. You must be happy with the outcome. After all, you are the one who will have to live with it.
Prudential Real Estate of the Rockies
WOW! You've received some great tips here - without cost to you! I've read all the responses and want to add just a couple observations that wren't addressed:
1. if your agent is acting as a Transaction Broker he/she has no obligation to counsel you. To work on your behalf you need a Buyer Broker relationship (Agreement)
2. the furnace issue IS a health and safety hazard and IS required to be repaired/corrected by the Seller - provided you show proof
3. I always suggest to my buyers- if you want 3 things fixed, ask for 6. Make the Seller feel they are getting a 'break'
Best of luck!
Metro Brokers - The Realty Werks
I work with a lot of Flip investors as well as Owner Occupants seeking value. And I would estimate that the average vintage of my over 200 completed transactions in Denver is probably 1930's.
Couple of comments:
1. I coach all of my buyers and investors to offer and negotiate on the visible condition that they know and can see (old carpet, dated kitchen/bath, etc) AND what is presented in the Seller's Property Disclosure.
2. Your agent should help you with market comps to help discern value. A full price offer may be a great buy if the home is worth significantly more than the ask price. This happens. A lot. Full Price may be worth it with the $20K in improvements you mention. Any experienced Real Estate agent can help produce that estimated value.
3. I coach my buyers to negotiate on Inspections Items that they can't see/know, is not on the Seller's Property Disclosure and only a professional inspection is able to detect. Your items pretty much fit that bill.
Lastly, to me, it all comes down to the value. It is very possible that this property may be worth your Full Price offer even with the deferred maintenance. It it had multiple offers, the sellers are likely to dismiss your requests and go to one of the other buyers. If I were the listing agent and without knowing specifics, that is likely the advice that I would give me sellers. So consider that your agent is looking at this that way and is probably not "rooting for them".
Best of luck to you,
You can ask for anything you want on an inspection notice. Normally I counsel my clients to pick their battles because a really long laundry list of small things usually rubs everyone the wrong way, sellers agent and seller. But the things you are citing are bona fide material defects and your agent should write up the inspection notice per your directives- the buyer's agent works for you..
But there are some things you should know about inspections in CO. First: Typically you won't get everything you ask for. Second: If there are material defects about which you can provide written documentation, then per CREC rules, the seller and the seller's agent are required to disclose these defects to each and every other buyer that comes along behind you. So most of us know it is easier to try to keep the current contract moving forward. This is to your advantage.
When you write up your inspection notice be specific- if you want the roof replaced state why and provide documentation. I would get a roofer to go out and take alook at it if I were you and then ask him for something on his letterhead stating that it needs to be replaced and why. Attach this to your inspection notice to correct. If the furnace really is leaking C-O gas there is no negotiation. It should not be run and Excel Energy should have come out and shut it down and red-tagged it. It has to be replaced and your lender probably wouldn't let you close on the house with it. Insulation- you won't get this one but it never hurts to ask. And chimney- this is afire hazard if it is broken down and there is creosote build up - but you may or may not be able to get this one. I would throw a few "givemes" on the inspection list- like the insulation. You can assume they won't do it and it's not a big deal for you to do. You can probably install some yourself or find a handyman to do it for cheap. By putting a couple of "givemes" on the notice you help the seller feel good about not caving to everything. Remember: the mark of a good negotiation is when both parties feel like they gave a bit more than they wanted to but you still came to agreement. It's a bit like a chess match.
Last but not least- don't get caught not being able to see the forest through the trees. If you really like the house and you can see yourself living there don't get hung up on the small stuff. Home ownership comes with responsibilities. You will have to do some work, which is fun. I hope that helps a little...and remember the whole process is a big commitment and a great learning experience but it is also supposed to be fun! So step back, take a deep breath and have some fun out there!
Carole & Greg
Good Luck and let us know what happens
the reason we put in full price for the house was that it had two other offers (one was a flipper). we really loved the house so we put in full price (we didn't know there would be so much wrong with it). Ofcourse when buying an older house there are going to be problems but $20,000 is just out of our price range at the moment (unfortunatelly). so we are trying to negotiate something with them. there are a lot more problems than the ones I listed (those were just the main issues the concerned us).
we have told our agent that if they dont agree to fixing some things we just can't do it. This house is a very nice house (great layout and a little biger than some other houses we saw). and we know in the long run it would be great investment however we just can't afford it at the moment.
I will definitely look into the 203K loan. thank you for mentioning that to me.
With your most recent comments, I would request the repairs, and stick to your guns. If they won't do them, but will give you a credit in the amount to do the repairs yourself, you will want to contact your lender to make sure the home will qualify for the loan. If so, you're good to go. Additionally, I do agree that a 203K loan might work well for you.
If the Sellers won't do the repairs or give you a credit, and the home is priced the same as other homes that are in better shape, maybe you should find a different house that is priced more correctly. Simply, if it needs $20,000 of repairs, and is not priced the same amount lower than other homes that have recently sold, then you're overpaying by about $20,000 for the home.
Best of luck to you!
Cherry Creek Properties
(303) 713-9000 Office
(720) 839-2659 Direct
In all honesty, if I where a seller who priced a home aggressively enough to generate a full price offer, I wouldn't be willing to do all this. I may consider one major item to get the deal done, but asking for a roof, a furnace, and electrical seems extreme. The furnace problem isn't something you would have known during your initial viewing of the house, but you should have had some clue as to the roof and electrical panel.
Lastly, once you start asking for these things, be prepared for the underwriter to start picking at every little issue with the home.
I'm not saying don't ask for repairs, I'm just saying it's dependent on how good of a deal the house is otherwise. Look at what you really need/want to have the house be worthwhile for you. Then stand your ground or be prepared to walk away.
The price of the house (despite all the work that needs to be done to it) is the same as other homes selling on that block which were more updated and ready to move in. that is why we thought the sellers should agree to fixing some things up for us...
RE/MAX Alliance Central
Instead of asking them to actually fix those things, I would ask for a reduction in purchase price. (Personally, I would rather let my buyers be in charge of hiring their own electrical / furnace contractors, rather than sellers just pick the lowest bid). You want it done right. Good luck!
That depends on how much work needs to be done according to the inspectors report. Normally an Inspection Notice is done to outline the work you would like done. It is possible that the seller might say let's adjust the price X amount in lieu of the repairs. If you do this be sure and check with your lender to make sure the amendment is worded correctly per their investor bank's requirements. If and how much you can negotiate is up to the seller since you already have a firm contract with a determined price included. Good luck with your purchase.
Robert McGuire ASR
Your Castle Real Estate
1776 S. Jackson St. #412
Denver CO 80210
Direct â€“ 303-669-1246