Home Buying in 80203>Question Details

Sasha_Tovbin, Home Buyer in Baltimore, MD

Negotiating after inspection

Asked by Sasha_Tovbin, Baltimore, MD Thu Dec 20, 2012

We are in the process of purchasing our first home. Our agent didn't see anything wrong with the house when we looked at it. We were expecting a roof replacement possibly in a few years, but not right now. However, the home inspection has determined that the roof is leaking and needs to be replaced now. It also determined that the compressor is 20 years old and it almost certainly needs to be replaced. The dryer is not working and there are many other issues (live wires in electric box) etc. that will require electrician work for safety. The hot water isn't working in the house (even though the heater seems to work). We are not nitpicking on the many cosmetic/ handyman related issues that were found. However, we were told by the agent that this is a home in move-in condition. We figured that into our pretty generous offer, which was quickly accepted by the seller. Can we reasonably expect them to negotiate price that we can make repairs on the major things - roof, A/C?

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Suzanne MacDowell’s answer
It may get a little tense, but the seller will need to understand, no one is going to write a mortgage for a home in need of these types of repairs. So, if they refuse to negotiate with you, one of two things is going to happen; either they will have to do the repairs themselves, which sounds like it could be costly, or they will not be able to accept offers based on standard FHA mortgages going forward. Furthermore,iIf you allow them to see your home inspection report they will be obligated to disclose these conditions to future buyers.

It's hard to know whether people will be reasonable but it would be in everyone's best interests if they were. My suggestion would be to get a good repair estimate and at least try. I would also recommend that you do the repairs yourselves. That way you have some control over the qualify of the repairs.

Good Luck.
1 vote Thank Flag Link Fri Dec 21, 2012
This is the perfect time to re-negotiate the price for the house. Ask your real estate agent to write an addendum for a new purchase price and use the inspection report as your main tool to start the negotiation for the right price of the property.

Best of Luck,

Maria Cipollone

Century 21 Tenace

1 vote Thank Flag Link Fri Dec 21, 2012
The whole purpose of the inspection is to determine what is wrong with the property. If there are major repairs that need to be done then I would defiantly use that to negotiate the price of the home.
0 votes Thank Flag Link Sun Jan 27, 2013
Hi Sasha_Tovbin: Your update below pretty much establishes your bottom line. And, from the information you have provided, it seems like a fair request. Of course none of us know what the sellers believe. But, that may not matter to you. If you cannot come to a mutually agreeable solution, your best option is to terminate and start looking for another home. This,of course, assumes that you are still in the contractual inspection period, which may not be the case as I write this a month after you asked the question.

0 votes Thank Flag Link Thu Jan 24, 2013
It ususally depends what type of sale and if the seller priced the home lower than market value reflecting the condition. All you can do is make the request in writing for them to fix or credit you so you can fix.
0 votes Thank Flag Link Sat Jan 19, 2013
Hi Sasha_Tovbin Every sale and every seller is different. However, if you find material damages that were not obvious when you made the offer on the property, I would definitely ask for those items to be repaired / replaced as necessary. The seller will have choices as to his/her response. They can either agree to fix everything requested (yea) or they can fix some (you'll need to determine if that is acceptable); or they may not want to fix any, at which time you may want to go find another house! Please note that it is important that you speak with your lender if they are not fixing everything, or if they are offering a cash settlement as this may affect your loan. Hope that helps. Best of luck to you.
0 votes Thank Flag Link Sat Jan 19, 2013
I am a Realtor in Dayton, TN and the buyers can definately negotiate after the inspection. Read your contract carefully. When I write a contract for a buyer, I usually leave 10 days for the inspection period and 3 days for the sellers resolution period. That means that you would have 10 days to do the inspection and come up with a list of "objections" that you want the seller to repair (or accept the property as is). The seller will have 3 days to "counter" what he is willing to repair. Considering your major factors I don't think it is unreasonable at all to come back with a list of requested repairs to be made by seller.
0 votes Thank Flag Link Thu Dec 27, 2012
Hello Sasha,

I am in California. Here buyers have 17 days from the time an offer is accepted to conduct their inspections. Agents are not home inspectors, and can only make an assestment on what they see with their naked eyes. Once the professional inspector comes out he/she will find things the buyer or agent would ever find.

That being said, if you have documentation of MAJOR/ costly repairs needed on the home you have every right to:

1.Ask the seller to accept a lower price, as the home is a bit of a fixer
* if you are using FHA financing the loan will not fund with a leaking roof. This will have to be repaired as a loan condition prior to funding.

2.Another option is to ask the seller for a "credit" so that you can have the repairs made after closing

3.If the seller is not willing to agree to any remedy, you may have to move on from this property.

Best of luck to you!

Kawain Payn, Realtor
0 votes Thank Flag Link Thu Dec 27, 2012
Hi Sasha,

If the seller is providing Home Warranty at closing, make sure it is stated in the Contract or an Addendum. Also, check what items are covered. If you like the house and are getting a good deal, I really hope you and the sellers can come up with a reasonable compromise!

Keep us posted.

Marina Bay
Cherry Creek Properties
0 votes Thank Flag Link Wed Dec 26, 2012
Sasha - see if they'll split the difference between your 15k and their 8k. That would get $11.5k. Also have them show you a copy of the HOW. This would be a very generous position on your part. Otherwise I'd walk from tis deal.
Tim Klein
Metro Brokers - The Realty Werks, LLC
0 votes Thank Flag Link Tue Dec 25, 2012
Just wanted to update that the seller claims that they have a home warranty and a service contract on the AC/water heater that we could continue. They are offering 8000. Repairs for all problems found would be over $30,000. Repairs for major problems, more like 20,000 (the roof alone was quoted at 12,000 -it's a complicated roof - skylights, two different kinds of roof, wrong materials used etc.). We don't really want to agree to less than $15,000. That would at least address the roof and A/C
0 votes Thank Flag Link Tue Dec 25, 2012
Run don't walk!
Flag Wed Dec 26, 2012

It sounds there are a lot of major issues with the property. If it's a bank owned property and you are buyer 'as is" (which is the case with most bank owned properties), then you can either proceed with the purchase and have the repairs done yourself after closing or terminate the contract before the Inspection objection deadline and get your earnest money back. There are no negotiations with a bank.

If the seller is an individual, then I would ask for all these items to be either repaired or the purchase priced reduced by the amount these repairs may cost. The seller may agree or disagree with some or all the items. But it is certainly is a big negotiating step of the transaction and your agent will walk you through it.

Please let us know how what you end up doing and how it turns out!

Marina Bay
Cherry Creek Properties
0 votes Thank Flag Link Tue Dec 25, 2012
Everything is negotiable. The reason you hire a professional property inspector is to find problems that are not just cosmetic. You can request for repairs to be made to all the issues in the inspection, it is completely reasonable for you to expect everything in the house be in working condition. If your uncomfortable with anything in the report or the sellers are unwilling to fix any of the issues you can also walk away.
0 votes Thank Flag Link Tue Dec 25, 2012

It is very reasonable to expect them to respond to your inspection items. They may even be expecting for you to ask for certain things to be done. If this is an FHA loan which most 1st time purchases are, the FHA inspection will require a roof certification and any safety and health issues to be addressed before you can go through with the loan. You are taking the right approach by not addressing minor and cosmetic items; but I would certainly insist on the other items to be done or get your Earnest Money back and search for another home. Best of success.

Robert McGuire ASR
Your Castle Real Estate
Direct - 303-669-1246
0 votes Thank Flag Link Fri Dec 21, 2012
I completely agree with Tim Klein. This sounds like a bad deal. Are you sure your agent actually represents you and not the seller? Your lender will want some of this work done prior to closing. Yes, yes, yes you can and should get the seller to fix or credit you for these repairs. Your agent and your lender will guide you on how to proceed.
0 votes Thank Flag Link Fri Dec 21, 2012
Absolutely! This whole deal sounds bad to me. Based on inconsistencies and deceptions, I'd walk away from this. For one, 'the agent said the home is in move-in condition'? Your agent or the Seller's agent? The Seller's agent shouldn't even be speaking directly to you.
If the A/C works, the Seller has no obligation to replace. Maybe they can get the roof replaced through their insurance. Electric and hot water is a must. This also doesn't mean the inspector found everything that needs attention..........
Best of luck, Sasha!
0 votes Thank Flag Link Fri Dec 21, 2012

The first thing you should do is to consider the terms of your agreement carefully, Most standard (not an AS IS contract) contracts do include repair limits and terms that outling buyer and seller responsibilities. This information should be clearly understood.

The hot water should work and the electrical issues (safety) definitely should be addressed by the seller. On the compressor, normally the age of the compressor is not the determining factor for replacement....it's simply whether or not it works as designed. Bringing in a certfied AC technician for a written evaluation would be completely within reason. This should help you understand this concern.

Buying a home with a roof in place that you know will need replacement in the next several years is one thing but buying a home that requires an immediate replacement is entirely different. You may want to consider the same course of action as with the AC unit. That is to bring in an expert to evaluate the roof system. If the leak is not related to the general roof condition and can be repaired to your satisfaction this could resolve your issue. However, on the other hand if the report shows a new roof is needed now....you have documentation that this is the case and can use it in these negotiations. Even better is having two or more companies with the same recommendation.

Hope you find this information helpful.

Best wishes,

0 votes Thank Flag Link Fri Dec 21, 2012
Here in Florida, there are several options.
The situation, as you describe it, will create challenges for securing financing. You do not mention if you are financing this purchase. A lender is less likely to approve a mortgage on a structure that is in a state of acceleration deterioration. (same FHA programs do address 'fix up' situations.)
If the home was listed 'AS-IS' this may indicate the seller is unwilling to be OBLIGATED to make any repairs. This does not mean the seller will not. As Suzanne indicated, these issues will not disappear with a new buyer. It is very likely the seller was unaware of an active leak.
The seller may:
1. Fix the roof
2. Reduce the price and find a cash buyer
3. Negotiate with you.
4. Remove home from market. Fix the stuff. Raise price and sell to a new buyer.
If the listing agent has been paying attention, there should be a Plan B ready to roll which includes the list of agents who have interested buyers. The wording will be changed from 'move-in' to 'roof exceeds service life' and find a new buyer.
You need to decide how much you want this house and if the possibility exists that you will get what you want. The seller DOES have options also. IF the seller does not have the capacity to fix the roof or are unwilling to do so, they may try their chances with a new 'cash' buyer, very likely an investor type If you are financing this purchase, the decision really isn't yours to make but may be that of the lender.
Of course, you SHOULD ASK for provision for the roof to be replaced. You can not tell what a seller is willing or able to do. Then have your plan B ready in case you don't get what you want.

Best of success in finding the perfect home for you.
0 votes Thank Flag Link Fri Dec 21, 2012
If they don't negotiate the price then terminate your offer and move on. If you're working with the listing agent that was your first mistake, Buyers should never ever work with the listing agent, but should have their own buyer broker who is looking after them.

It's obvious the agent has no idea what their talking about or they would never have indicated that the house was in move in condition.

The Sellers are trying to dump their home and they already probably know about most of the defects and simply lied on their Seller disclosure. They have two choices, continue being delusional or work to make a deal. The truth is no lender will give you a mortgage if they know the condition of the home.

Try to negotiate but be prepared to walk away. I've attached a link below on how to find a great Realtor regardless of where you live. You may be interested in reading it if you decide to go our and find a more experienced Broker to work with.

Good luck and Happy Holidays.
0 votes Thank Flag Link Fri Dec 21, 2012
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