Home Buying in 11550>Question Details

New Homebuyer, Home Buyer in Nassau County, NY

If I make a offer on a home and after inspection find out that there is alot of repairs needed can I lower my offer amount?

Asked by New Homebuyer, Nassau County, NY Tue May 29, 2012

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15
Janet Nation, CBR’s answer
You can but it doesn't mean that will work for you. Typically the home is priced according to its condition, so if it's already priced accordingly you can't expect an additional reduction. Most homeowners would prefer to do some or all of the repairs rather than give an inflated credit.
1 vote Thank Flag Link Wed May 30, 2012
Your agent can better advise, therefore consider a consultation--does the list price already reflect any necessary repairs...
2 votes Thank Flag Link Tue May 29, 2012
Negotiating inspections is critical. Make sure you begin your home buying process with an experienced agent. Naive agents can cost you.
Most inspection addendums include the option of backing out of the transaction completely if you are unhappy with the inspection but most of the time the negotiations work out.
If your a first time homebuyer remember that it is better to have the costs of repair included in the loan and one of the ways to do that is have the seller make the repairs even if the purchase price must be raised. So much to explain... go to your-road-home.com. And dont let anyone discourge you from buying a home. Now is the time!!!
0 votes Thank Flag Link Sun Jan 13, 2013
It isn't always better to have the cost included in the loan. Then you are paying interest on that money when you don't have to. It also raises your monthly payments, possibly above your budget. If you are putting 25% down on a house (assuming this is the cutoff for your lender), then adding more money to the down payment may not be useful. So, if you have that extra cash, then spend the cash rather than adding it to a loan and thus requiring a larger down payment.

Always be willing to walk away from a house. Offer an inflated valuation for the repairs to the sellers and reduce your offer by that amount. They can reject, counter, or accept the offer. You'll have to try to guess if they are desperate enough to take the deal you are offering or at least counter.
Flag Wed May 27, 2015
Dear New Homebuyer:

Yes you can counter on your offer after inspections. Did you know you can also counter a bank on short sale as well? They dont have to accept the counter, however, your Realtor works for YOU!

I would be comfortable lowering my offer IF the repairs are expensive. If they are cosmetics then you might be considering moving onto another property.
I suggest to my clients to look at the expensive repairs: roof, septic, furnace,wells, foundations, mold issues, radon, anything that will cost more than you wish to pay. If its like the cabinets arent straight or the toilet runs, then its cosmetics.

Good luck with you new investment!
betty
0 votes Thank Flag Link Thu Nov 1, 2012
Sure you can. Ask your Agent. They can answer your questions. Consider asking the Seller to make the repairs, instead of renegotiating the purchase price.


Feel free to contact me anytime, should you have any questions.


Wishing you the best of luck,


De Vonte Williamson
Licensed Real Estate Salesperson
Serving Long Island & Queens
Coldwell Banker Residential
Direct:(631)638-6193
Mobile: (631)384-3695
cbmoves.com/DeVonte.Williamson
"I Stand Behind Getting You Results!"
0 votes Thank Flag Link Mon Aug 6, 2012
Good morning New Homebuyer,

Typically your Home Inspection will alert you to problems in five key areas, and these key areas directly relate to the contract of sale:

1. Foundation: sound and solid
2. Roof free of leaks
3. Plumbing working and leak-free
4. Heating system sufficient and operating
5. Electrical system sufficient and up to code

If there is a serious problem with any of these five items, typically the Seller has a responsibility under the terms of the contract of sale to repair the problem at their expense, not the Purchaser's expense. Sometimes a Purchaser will receive a credit at closing to repair one of these items (assuming the home and the defective issue has not compromised the Lender's appraisal). When the Purchaser receives a credit at closing, the amount of the credit is based upon legitimate estimates for repair and negotiations between the Attorneys representing each party.

Other items you discover are in need of repair/upgrade (i.e. diswasher not operating properly; air conditioner on second floor inoperable, etc.) can be negotiated for a repair credit or replacement at the Seller's expense. Again, these negotiations are handled by the Attorneys.

It is extremely RARE that a purchase price is reduced due to repairs from a Home Inspection. Best to consult with your Attorney for more detailed information in this area.

If you don't already have a good real estate Attorney and you're shopping for homes, you need to reverse your process. First, get properly prequalified for mortgage financing by a Local Mortgage Banker. Second, line up your Attorney. Third, line up your Home Inspector. Fourth, line up a great local Realtor with personal experience in the area in which you'd like to buy.

Trevor Curran
NMLS #40140
0 votes Thank Flag Link Mon Aug 6, 2012
Yes, Make a counter offer less the repairs need,
Your agent should have had a statements baised on Inspection of property to protect you in special stipulations on your purchase contract.
0 votes Thank Flag Link Fri Aug 3, 2012
of course that would be smart. then at that point the seller is so deep in the sale usually he would agree to your terms.
0 votes Thank Flag Link Fri Aug 3, 2012
I look at it like this: If you don't ask for something, you will get nothing. Every situation is different. In situations when homes are in need of major repairs detected through a home inspection, it is common to start to re-negotiate. That doesn't mean that anything will be agreed to. This is where you or your representing agent's negotiating skills will shine. Keep in mind before signing a Sales Agreement/Binder that you state offer is subject to Home Inspection. This avoids any surprises to the seller when you come to re-negotiate after inspection. In addition, when negotiating emphasize on the larger issues and make sure that those are the ones that will be taken care of. Make sure to have professionals give you true estimates on the cost of replacements or repairs. On occasion the seller will not give any reduction towards the agreed to price. Instead, he or she will do the repairs themselves of hire the proper professionals to do the work. Good luck
0 votes Thank Flag Link Thu Jun 14, 2012
@Roland: Thanks for the clarification about Upstate New York; you caught me out, there! But if you notice, this HomeBuyer is posting in Nassau County, which is not NY City, and my answer holds true for ALL downstate New York, including Suffolk, Westchester, Dutchess and Rockland (and probably Putnam, too) Counties.

In the downstate counties we use an attorney; the Realtor does NOT prepare the Purchase Contract.

IMHO: Attorneys should be involved in this process in EVERY COUNTY in EVERY STATE. I don't care to hear from Realtors in other areas where they don't use attorneys that the process works very well without an attorney. I think one of the reasons we're in such a mess is the lack of Attorney involvement in home buying transactions around the country.

Trevor Curran
NMLS #40140
0 votes Thank Flag Link Tue May 29, 2012
Let me add to what Trevor said. He is talking about New York CITY, which does not have all the same laws and practices as the rest of the State.

Elsewhere, real estate agents, not attorneys, normally prepare the Purchase Contract and if the buyer wants (or needs) a contingency for an inspection, then that is part of the contract, the same is if he needed a mortgage contingency. The seller does not have to accept this, though nearly all do. If he doesn't there is no contract of course. I often have buyer and seller sign right away and use an attorney approval clause (which functions like a contingency) to iron out differences that may be perceived by the attorneys.
0 votes Thank Flag Link Tue May 29, 2012
@Ron: here in New York the contract of sale rules the day with regards to the transaction in general and repairs in particular.

In a New York home purchase, the timeline goes like this:
1. Offer accepted
2. Contracts prepared by Seller's Attorney and forwarded to Purchaser's attorney for review
3. Home Inspection conducted PRIOR to signing contracts. If inspection reveals a problem with Foundation, Roof, Plumbing, Heating or Electrical, Purchaser's Attorney discusses with Seller's attorney to obtain satisfactory remedy PRIOR to contract signing. The remedy can be either a Seller repair or Seller credit to Purchaser at closing.

Since Home Inspection is done before contract is signed, the Purchaser has the opportunity to negotiate or walk away with no obligation to the Seller.

Different in New York.
TC
Trevor Curran
NMLS #40140
0 votes Thank Flag Link Tue May 29, 2012
Good morning,

Typically your Home Inspection will alert you to problems in five key areas and these key areas directly relate to the contract of sale:

1. Foundation: sound and solid
2. Roof free of leaks
3. Plumbing working and leak-free
4. Heating system sufficient and operating
5. Electrical system sufficient and up to code

If there is a serious problem with any of these five items, typically the Seller has a responsibilit under the terms of the contract of sale to repair the problem at their expense, not the Purchaser's expense. Sometimes a Purchaser will receive a credit at closing to repair one of these items (assuming the home and the defective issue has not compromised the Lender's appraisal). When the Purchaser receives a credit at closing, the amount of the credit is based upon legitimate estimates for repair and negotiations between the Attorneys representing each party.

Other items you discover are in need of repair/upgrade (i.e. diswasher not operating properly; air conditioner on second floor inoperable, etc.) can be negotiated for a repair credit or replacement at the Seller's expense. Again, these negotiations are handled by the Attorneys.

It is extremely RARE that a purchase price is reduced due to repairs from a Home Inspection. Best to consult with your Attorney for more detailed information in this area.

If you don't already have a good real estate Attorney and you're shopping for homes, you need to reverse your process. First, get properly prequalified for mortgage financing by a Local Mortgage Banker. Second, line up your Attorney. Third, line up your Home Inspector. Fourth, line up a great local Realtor with personal experience in the area in which you'd like to buy.

Trevor Curran
NMLS #40140
0 votes Thank Flag Link Tue May 29, 2012
Depends.

it always DEPENDS!

If you have a Buyer's Agent representing you, you wouldn't have to ask this question.
So, I will assume that you are trying to do this on your own:

If, in your OFFER, you added a CONTINGENCY for the Inspections, then you gave yourself 3 "outs";
You can walk away and get your deposit back
You can accept it, as-is
You can negotiate the repairs or the price, or both; with the threat of walking away.

If you are trying to do this on your own, and you screwed it up;
I won't shed a tear for you.

Or, as Dr. Phil would say; "How's it working for you?"
0 votes Thank Flag Link Tue May 29, 2012
Hello New Homebuyer,
If you discover many needed repairs after your home inspection, then it is usual to request that the seller make these repairs or you can ask for a credit at closing so that you will have some additional funding to make those repairs yourself.

Good luck to you!

Laura Feghali
Prudential Connecticut Realty
0 votes Thank Flag Link Tue May 29, 2012
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