Home Buying in 64068>Question Details

Lisa Codding, Home Buyer in Liberty, MO

Negotiation after the inspection?

Asked by Lisa Codding, Liberty, MO Sun Dec 9, 2012

My husband and I are first time home sellers. We have been made an offer, a couple thousand below our asking price which we accepted. The inspection took place last week and the buyers have come back asking that we install a radon mitigation system and replace the roof. We will agree to the radon system but nothing is wrong with the roof! It's 7 years old, no leaks or anything, they just want a new roof because of its age. ????? W are taking an offer nearly ten thousand below what we bought the house for ten years ago, and the idea of tacking on another $5000 for a new roof does not amuse us. Our insurance agent sent a surveyor and found no fault with the roof. If we refuse to replace it can they just walk away from the contract? I appreciate any advice, never realized how much work goes into a sale. (By the way, both the buyer and ourselves are using a licensed REALTOR)

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19
Sorry to hear they backed out Lisa. As you have seen Realtors are always happy to give you their opinion. No shortages here:) Good luck going forward.
0 votes Thank Flag Link Sat Dec 15, 2012
The buyers had 3 different roofing companies inspect our roof, and every one of them stated nothing was wrong with the roof. So they pulled out of the contract today.
0 votes Thank Flag Link Sat Dec 15, 2012
Seems the buyer likes your home based on how far he has gone with the inspections.Though if there is a home contingency clause in your contract he might walk away.
He might just be pushing you to put up a new roof for him.
0 votes Thank Flag Link Sat Dec 15, 2012
Man. I'm glad I don't have any real estate dealings in MO!!
0 votes Thank Flag Link Fri Dec 14, 2012
continued from earlier:
saying that however doesn't always mean anything. I've had building inspectors break things in a home and refuse to fix it and my seller refused to take them to small claims court which is the only way to force their hand and which you could do now concerning your roof - they did not have your permission to draw on your roof and they have devalued your home if the contract falls apart since unless it a) rains soon and b) the writing comes off with the rain, any future potential buyers and their inspectors will see the writing on the roof and will question it and will be afraid that the contract fell apart because of something that was seriously wrong that you aren't disclosing. As a result, I think you need to talk to your Realtors broker and ask them to talk to the buyer's broker about having the roof washed to remove the markings.

Please keep in mind however, that you need to be certain of WHO put the marks on your roof. In our contract their is also a clause that says that the buyer's insurance company has to check the home to ensure it is insurable. Some insurance companies do that by merely looking in the computer to see how many insurance claims have been filed against the home, while others will send someone to the home to check the roof, the electrical panel box, etc. I have never seen them write on a roof, but they would (based on how the st louis contract is written) have the right to get on the roof and inspect it without an appt and their timeline is (at least here) 10 days from the contract acceptance deadline. The other person who might have been on your roof is if the buyer is using an FHA or VA loan and their appraiser in the course of his inspection did a roof check. Again, I have never seen one who wrote on the roof, but that is another possibility. Note that if the buyers insurance agent says the roof is damaged to the point that they can't get insurance they have the right (as long as it is within the time period specified on the contract) to walk away from the contract and get their earnest money back. If their appraiser stated that the roof was bad and had to be replaced, then they typically the buyer will not be able to get a loan, which will also end the contract. A third possibility is a municipal inspector, but in my area I have never seen one get out a ladder and get on a roof. If a municipal inspector cites a roof, it would have to be fixed before a buyer could get an occupancy permit which means unless they are a cash buyer or have a renovation loan, they won't be able to buy.

You have to decide what you want to do about the buyer's requests. Keep in mind they are negotiating, they cannot demand that you do everything on their list unless they put that in the initial contract and you agreed to it (I often write in the contract for my buyers that the seller will provide clear municipal inspections and the sellers typically agree to it), so you can go back and tell them what on their list you will agree to do and what on their list you won't agree to do. then wait for their response, then respond again. Often you can reach a middle ground that you can both agree to once you start negotiations. If you have decided that you just plain want to end the contract and stop dealing with this buyer, you can respond back that you won't do anything, the buyer will have to take the home "as is" at this point, but be aware that you will have to start all over again looking for a buyer and you will have to update your sellers disclosure with the items that were found on the buyers building inspection - personally, I would attach the report from your insurance company stating that there was no damage to the report as well.

Roofers give free estimates for roof damage all the time. They don't make any money unless they convince someone to repair or replace the roof, so it's in their best interests to find damage. We had a really bad storm last spring and had hundreds of storm chaser companies here for awhile telling people they had damage when their insurance companies said they didn't have damage. In some cases what we ended up with was putting a reputable roofer on the roof at the same time we put the insurance company guy on the roof and then let them discuss it, but the end decision was what the insurance company said, not the roofer.
0 votes Thank Flag Link Thu Dec 13, 2012
OK, first, the questions about the MO contract - note that different contracts are used in different parts of the state, so I'm talking St Louis version here, you need to sit down with your KC agent to determine what is different.

MO STATE LAW - this was a change just a few years ago. When the buyer and the seller sign a mutual release, they can sign it without releasing the earnest money which then presents problems. Typically whatever causes the mutual release will initiate a clause in the contract that says which party (buyer or seller) gets the money, however if the money is held by a Real Estate company they typically will require a mutual release stating who gets the money. If it's held by a title company or other escrow agency, then those companies will often give back the money without a mutual release. The state discovered how much money was being held in Real Estate Escrow accounts and how long some of it had been held (some amounts had been held for over 20 years because the parties were so angry) that the State created a law that says the earnest money can ONLY be held for 1 year by the Real Estate Company in it's escrow account. At the end of the year, it has to be turned over to the state, who puts it in the "lost money" account (it does not go into general revenue) and the state is then responsible for determining who gets it. I have to counsel all my buyers on this before they put down an earnest money check. The title companies are NOT held to the same law, so some title companies will also follow it while others do not. (In this case, I don't know who is holding the money.)

I've seen some agents who held onto the earnest money to the last day by contract that they have to deposit it, so that if the contract breaks apart during the building inspection they can tear up the check without ever depositing it - not really legally correct but they do it.

When a contract falls apart, sometimes both sides are so angry at each other that they will refuse to sign releasing the money out of spite. When I'm a buyer's agent and the seller won't release the money, I counsel them that they have the right to put a lien on the home which prevents the seller from selling to anyone else until they get their money back or to take the seller to small claims court (which means the seller has to take off work and sit around at the county courthouse waiting all day to get called in for their case and if they don't show the buyer gets damages as well as the money, but then the buyer has to take other legal steps to actually collect it, so typically for the less than $100 it takes to file the lien and file a claim in small claims court, the buyer gets their money back.

NOW - the buyer has the right, per the st louis contract to have all inspections done within a set amount of time (the preset time is 10 days in the contract) and to then present by the end of the 10th day, a form to the seller stating that he is satisfied with all inspections, he is walking away from the contract (in which case our contract says he gets all of his earnest money back once we make sure the inspectors have been paid) or to negotiate items on the inspection. Our contract then gives a total of 10 days to go back and forth until an agreement is reached. If no agreement is reached at the end of the 10 day period the contract is voided and the earnest money is to be returned to the buyer BUT both parties still have to sign the mutual release before it can physically be returned if a Real Estate company is holding the money. NOTE - our contract is written in such a way that if a buyer PAYS for an inspection, even if there is absolutely nothing wrong with the home, he has the right to walk away from the contract if he has NOT initiated any negotiations (it's our buyer remorse solution).

If he initiates any negotiations for repairs, lowering the sales price, a credit at closing in lieu of repairs or anything else, he then has to wait out the 10 days before the contract can be voided. During the negotiation period, if the buyer and seller can't come to an agreement, the seller can before the end of the 10 days, go back to the buyer's first request and say that he will do what the buyer asked for in order to not end the contract, or the buyer can accept the sellers last offer in order to not end the contract (I had one contract that got down to the last 15 minutes over a broken sash cord in a window before the buyer gave in to the seller not replacing the sash)

ONCE the buyer's side sends over the inspection report and their requests to the seller's side, the buyer's side is DONE with their inspection period, unless they have negotiated with the seller for a longer period. They cannot legally do any inspections past that time period, or send any contractors to the home to look at anything and give a bid, without the sellers permission. The buyer is responsible for his inspectors/contractor's actions. next page
0 votes Thank Flag Link Thu Dec 13, 2012
I would be annoyed as well. Communication is a must and a common courtesy. That said, everyone has an opinion on what reasonable communication and courtesy look like.
0 votes Thank Flag Link Thu Dec 13, 2012
I appreciate very much all the responses! However today I was very annoyed to find out our buyers sent their own roof expert over to my house to make their own assessment and did not notify anyone. They wrote all over our roof with chalk, things like L = 0. It looks ridiculous. I can't believe they could do that. If he fell off our roof and broke his neck I'm guessing it would be our fault.
0 votes Thank Flag Link Thu Dec 13, 2012
Dave is right on two counts, go back to your agent and follow their lead. Also, mutual releases must be signed by both sides for the earnest money to leave escrow, or else it gets turned over to the state in one year, is how I understand it here in MO. We do not provide arbitration without and amendment that specifies that is how it will be handled, normally when using MAR contracts.
0 votes Thank Flag Link Mon Dec 10, 2012
Hey, MO agents...help me out with MO law/practice (since Dave called me out as incorrect). There's no such thing as an automatic answer on good faith money, and I've never seen anyplace where both parties DON'T have to agree. In my experience, if the parties don't agree, it goes to a deciding third party (arbitrator, mediator, regulatory agency or court) who DOES decide who it will go to. Is that how it's done in MO? And if it went to such a body, would it not USUALLY go to the buyers in a case like this where they saw something in an inspection that they didn't like? Just curious. Don't like to give out bad advice (which is why I'm always careful to say things like "usually" or "it's all about your contract" or the like. Thanks...
0 votes Thank Flag Link Mon Dec 10, 2012
Hey Jim, Just so you know that was not directed directly at you:) The guy in Oklahoma is the one that really through me. He's giving her advice without even knowing our market here. For all he knows the area she lives in only sells one house a year. It is his kind of advice I was referring too.
Flag Mon Dec 10, 2012
They can walk for almost any reason basically. Rarely do people come this far and bail unless they have a strong plan B or circumstances have taken a 180 for them. Chances are they want the house, its a buyers market true, but they probably need a place to live. At the same time ask yourself...how bad do we want to sell, and ... how much do we like playing poker with the hand we have, and the hand they think they have?! Its hard to anticipate what the buyers want and are willing to do. You have collected the necessary facts to make a sound decision it sounds to me like. My advice is decide what you think is reasonable, fair, and prudent. If you and your spouse are in alignment and both agree with what you think meets that criteria then make your decision and put it on paper for the buyer. They will accept it, walk, or counter. You can find another buyer, and they can find another house. Ive had inspection negotiations last weeks until everyone was happy. The earnest deposit is going to be at risk regardless if your deal goes south, but keep in mind you wont get it unless the buyer says you can have it and likewise the buyer wont get it unless you say they can have it. Have fun and understand there is always another buyer, and....well there are always more house payments, utilities, taxes, insurance, maintenance, and lifestyle tradeoffs you make while looking for that next buyer.
0 votes Thank Flag Link Mon Dec 10, 2012
It sounds like there could be more to this scenario.....

Did the home inspection indicate a problem with the roof? It's good that the insurance company has "found no fault" with the roof. This is where problems are sometimes encountered.

Here's my point, if neither the structural inspector nor the insurance evaluation revealed a problem with the roof, where is the justified roof problem. It may be that the buyer wants a deeper discount or out of the deal. What is your agent's position?

Should you walk away? Unless there is more to this, definitely not. It may be time to consult an attorney, briefing them on these events and having them review your documents. A letter from an attorney explaining your legal rights relative to this may help the buyer to "see the light."

Having your agent speak with their agent about the situation and your plans to seek legal advice may be worth consideration prior to investing in a lawyer.

Best of luck,

Bill
0 votes Thank Flag Link Mon Dec 10, 2012
HI Lisa,
I thought I had answered last night but was sending it on my phone. Must not have gone through. I am a Realtor in the Liberty area so I use the same contract that you are most likely using. That is what several other agents on here keep referring too. Our KCRAR contract which has default settings for inspection periods but they can be changed. So that part depends on how the inspection and RUC period is filled in.
I do not know who your Realtor is but I would not want to step on anyones toes. It is easy for another Realtor from some other area that does not know all the specifics to make recomendations. The fact is you need to talk to your Realtor, take the information your are given and make the decision you think is best. I always advise my clients to go with their gut instinct and your case your womens intuition is rarely wrong.
The fact is the buyer is most likely either trying to get out of the contract completely by being unreasonable or they feel they can push you around. The agent that said you have to give back the earnest money is not correct in our area. In our area you have to sign a release for them to get the earnest money back. It is NOT automatic. Does not mean you will get it though either.
I do not feel comfortable saying anything more in this situation because you do have a Realtor that is giving you advice. I most likely know the agent if it is someone from around here. If I were in their shoes I would not want some know it all agent giving advice when we do not know all the facts such as: Are you getting above market price for your house, are you getting a fantastic deal on whatever you are buying, are there other circumstances to do with the sale or your purchase we do not know about. Lot's of things could be going on.
The best advice I can give you is go with your gut and do not give up on the deal easy. Get the agents to work for both sides till it is either put together or you just can't budge another inch. Inspection periods and RUC periods can easily be extended. From what you have said I believe it is a deal that can be worked out.
Good luck!
Thanks
Dave Haag
0 votes Thank Flag Link Mon Dec 10, 2012
What the buyer can do will depend greatly on the language in your sales contract, you should review it with your agent. I agree with you and think it's ridiculous that a buyer would want to replace a 7 year old roof. I think the minimum age roof they make is 20 years if not 25 these days. if you can provide some sort of documnetation for the age of the roof or when it was replaced that would help your case even more. You have an option, if you feel confident that you can get another buyer then don't give in to this otherwise stick with them. and try to work it out. The radon is understandable...good luck!

Christopher Pagli
Licensed Associate Broker
Accredited Buyer Representative
William Raveis Legends Realty Group
914.406.9023
0 votes Thank Flag Link Mon Dec 10, 2012
As usual, it's all about your contract. If the contract has a contingency for home inspection, that usually allows the buyers to walk and take their earnest money for anything they see in the inspection that they don't like. It usually doesn't have to be reasonable. So, they are likely using that fact to push you into buying them a roof that isn't needed. That's their prerogative. They hope that you will just buy them a roof rather than let them walk. It is YOUR prerogative to tell them no. Doing so would suggest that you don't think they will walk away over the roof. They might, or they might not. You may want to hedge your bet...offer them something to let them feel like they are clever negotiators without giving them a new roof. Maybe you offer them some additional reduction in price (whatever you're comfortable with, $500? $2500, or half a roof? It's UP TO YOU), just to make them feel good and keep the deal on track. Your Realtor has likely seen this before, work with him/her to determine the best way to proceed. But don't throw away the deal over pride. They are just being savvy buyers. Act like a savvy seller and protect the deal with the least sacrifice possible. Best of luck...
0 votes Thank Flag Link Mon Dec 10, 2012
You are in negotiations - that does not mean that you have do what tge buyer asks for,it means you have tonegotiate until tge contract dies or you come to an agreement that bothoarties can live with. In the St Louis contract we have 10 days to negotiate after the buyer presents the findings to the seller and at the end of the 10 days if we aren't in agreement the contract is over

My recommendation is ithe radon is above US standards, mitigate it since otherwise you will need to disclose on your sellers disclosure if this deal falls apart and tge next buyer will also ask for it - if its not above US standards then it doesnt require mitigation and you can give them govt info fromonline toback that up.

On the roof, did your insurancecompany that your insurance company have a copy of the building inspection in front of them when they checked the roof? If mot they ahould gave so they would know ehere to check. If they did and when they checked the roof yhey did not find any damage, I would supply a copy of their report to the buyer stating ggat it was checked and no damage was found

We've had a lot of hail damage in our area over the oast year and we often see buyer presume that its there as a result when the insurance company hasnt found any damage. If the insurance comoany pays you for ANYTHING - FIX it - the national insurance database will show the claim and the amount paid - not fixing it is insurance fraud and can kill your contract in a heartbeat when the buyers insurance company checks the database before issuing them a policy. If the buyers insurance company checks the roof and declares that it needs work then they may not be able to buy the home until the roof is fixed as their mortgage comoany may not give a loan for a home that cant be insured.

Note that if they found ine small spot that spot might be fixable without replacing the entire roof as well so that might be a negotiation point to go back with

Have your realtor go through your contract with you and discuss normal local practices with you before you make any decision on how to proceed
0 votes Thank Flag Link Sun Dec 9, 2012
I should add that their inspector claims to see a spot with hail damage, which the surveyor from our insurance company can't find. Can we just say no we're not fixing it? I know they've paid $500 for the inspection and put in $500 earnest money, not sure if this will make them walk away if we say no
0 votes Thank Flag Link Sun Dec 9, 2012
What did your Realtor say? You are paying for this advice so ask them and know they will give you the right answer, that is what you hired the professional for! Best to you in your sale too.
0 votes Thank Flag Link Sun Dec 9, 2012
He told us to get our insurance company to pay for it if the buyer thinks there is sign of hail damage. The insurance company says there hasn't been a hail storm in years and since we never reported anything they aren't paying
Flag Sun Dec 9, 2012
Cut this buyer loose and get a new one, if the buyer is pushing the roof when there is nothing wrong, you may be wasting valuable time, NOT being on the market, which will cause you to lose the REAL buyer that is out there looking for your home.

If there is nothing wrong with your roof a buyer cannot ask for a new one and this buyer is wasting everyone's time by being unreasonable.

Best of Luck,

Josh Barnett, Realtor
Metro First Realty
Web Reference: http://www.SoldOKC.com
0 votes Thank Flag Link Sun Dec 9, 2012
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