Home Selling in Texas>Question Details

L, Both Buyer and Seller in Texas

Option period and lowering the price plus repairs

Asked by L, Texas Wed Mar 19, 2008

We accepted an offer last week with a 10 day option out period. We had two offers on the house and they won. Today the Buyers agent has put a stipulation that all the minor repairs, caulking, label in the electrically box, etc be done at our cost as well as lowering the offer $10k. B/C his client didn't ask for a comp before the offer.

We feel this is dirty pool since they have since found out we have a contigency as well. We have turned away agents who first ask if an offer is on the house, as well as the other offer.

I think we will stay with our actual comps to our house and go from there. We don't have to sell the house - if it was meant to be then it was meant to be.

I plan to write the real estate board of my displeasure to the transaction if it cannot be remedied.

Does this sound to be an acceptable procedure in buying and selling? It may be acceptable due to lack of contract verbage, but it seems deceptive in nature, any ideas?

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Your clarification helps in answering your question more precisely. Thank you for the additional information.

Glad to hear you are working with a realtor.

You should have a copy of the offer you received and signed off on. Read the section about the option period and you may understand the situation better. You are frustrated with the selling process, but the option period is for "sleeping on" it and for investigating the property further. Ideally, the buyer's agent would have done his or her comps on your house during the offer process rather than to wait until the option period.

You do not have to accept their amendments and you can counter their counter. I sounds to me as though these buyers are first time homeowners or are type of folks who are just very demanding by nature or believe that they haven't or won't get the best deal if they don't negotiate every little thing and get the best price. I wouldn't take it personally. It's business.

For the rather minor repairs they have requested (which sound like the excruciating detail that would come out of a thorough inspection report), a decrease of $10K does not sound justified, but you could probably do the repairs yourself this weekend for a few hundred dollars worth of material from the home improvement store. Both the inspector and the buyer's agent could maybe have done a better job of explaining the consequences of making such a counter before they submitted it to you.

If the buyers want to knock money off the price of the house, you can counter by agreeing to reduce the sales price by a lesser amount than $10K. For example, you can knock off $5000, but exclude the washer/dryer, refrigerator, hot tub, wine collection, pool table, surround sound, plasma TV, etc. Whatever you are including with the sale of the home that you believe is of sufficient value to make the reduction worthwhile for you. You do have this negotiating tool.

FYI: even if you reach agreement at this stage of the process, you still have additional hurdles to pass. Often times the offer includes a "Third Party Financing Addendum". If you've signed off on this page as well, the buyers can walk away from the deal without penalty if they cannot come up with the financing they specified in the addendum.

If your current contract is cancelled or withdrawn, prepare for the next round a bit differently.

1. Ask your listing agent to pull new comps on your home to see what the current market is like. Even a couple of months can make a difference in the current market value. If there have been a rash of foreclosures or pre-foreclosures in your neighborhood and homes are being sold for less than they were a year ago as a result, those lower prices will be reflected in the current comps.
2. When you enter into another contract with an option period, retain the right to continue showing your property during that period if possible or negotiate a shorter option period, i.e., 3 days or 7 days. This shorter period removes the house from the market for less time, but it still allows the buyers time to send in an inspector. Under the option period, the option period can also be negotiated to extend it should their inspectors not be able to get in sooner. I would not recommend not allowing an option period though. You would be shooting yourself in the foot, because then the buyers will wonder what you are hiding and most likely walk. The same if you list the property "as-is". That's a red flag to any buyers' agent to do everything in their power to convince their buyers to get that inspection.
3. Rather than to flat out reject any offers you receive during the option period, talk with your realtor about accepting back-up offers on the property. If the original contract falls out, then you already have the other offers ready to review.

Good luck, and try to keep your heads about you. It's a nerve-racking experience for everyone and it's not over until the last signature is on the last paper at the title company, the lender wires the money to the title company, and the proceeds are distributed. Some transactions are easier than other. Here's hoping yours goes more smoothly from here. Your buyers could just be bluffing.
0 votes Thank Flag Link Thu Mar 20, 2008
Confirm that they are still in their option period when they cancel. Also, was the option fee refundable? You can still nego. the repair request. I hope you have a good agent working for you. If not please contact me at the link below.
0 votes Thank Flag Link Tue Apr 15, 2008
Sam, I understand your frustration as a seller. Have the buyers done a home inspection? Is your agent in contact with them? The option period can be terminated before the 10 days if they have done inspection and you negotiated repairs. Also, there is no set fee for the option fee... it is completely negotiable, yes I have seen it where it was very high.

Sit back and relax, I am sure that everyone is doing their best to move it along. The buiyers don't want to be in limbo either.
Web Reference: http://www.sumnerrealty.com
0 votes Thank Flag Link Wed Apr 9, 2008
I'm selling a house for the first time in Texas. Before moving here I owned and sold three other homes. The 10 Day option period is a rip. I don't know who came up with that garbage. I can understand that it gives the buyer a chance to address "buyer's remorse" but I think the 100 dollar fee is about 900 dollars too low. The option period should be 100 per day. How did it turn out for you? I'm on day 4 of my 10 day hell.
0 votes Thank Flag Link Wed Apr 9, 2008
I'm right there now. I have never heard of such a thing as an option period....sounds like putting something on hold at a store. It's crap.
Flag Wed Jul 3, 2013
Oh, and the tax rolls are a crummy source for information on pricing your home for sale. You might consider appealing your assessment when you get your tax bill this year if your experience shows you that the valuation is too high.
0 votes Thank Flag Link Thu Mar 20, 2008
You are correct, those are all petty things on the inspection report. If this contract doesn't work out, you don't have to accept a 10 day option period... 7 days should be plenty of time to do a home inspection.

We all sometimes have to deal with unreasonable buyers but we have to follow their instructions anyway.
Web Reference: http://www.sumnerrealty.com
0 votes Thank Flag Link Thu Mar 20, 2008
Thank you all for your professional opinion!

To answer a few of your questions...
I do have an agent and is working great in this matter.
Our house has been listed for about 30 days and we have had on an average 2 showings a day. Last weekend I had 7 showings on Saturday and 4 on Sunday. We had a contigency offer 1 week after listing that fell thru.
The inspection came out clean with no major repairs needed for our 1998 home. The most major repair found was the Hot/Cold faucet reversed in Master shower. Items such as rusty nail on flashing, one plug did not test GCFI on exterior plug, partial clogged drain, panel breaker not fully labelled, screens not on windows (per agent, in garage), wall seam crack, anti-tip device missing. These are the items the buyer agent has deemed repairs or compensation for.
My mistake, it was my impression they knew of the contigency.
The back-up offer has since purchased another house. My agent has been contacting all the prior agents.

The buyer agent provided comps half single story (mine) and two story, the two stories are much lower in averages. I did comps based on these numbers as well as tax appraisal values and my house is the higher of all (only a handful of the 1k homes with two lots).

As for the contract option period, I thot the contract is that of a good faith contract and upon inspection/appraisal to be amended or opt-out not change the entire agreement. I hope to sell the house but we are not in need to sell (foreclosure, ARMS) so to play games is not where we are at in this stage.

Thanks all again.
0 votes Thank Flag Link Thu Mar 20, 2008
L
You are not clear whether you have a Realtor representing you or not. Do you?

Based on just the question, I am assuming you selling on your own, because this makes a big difference.

First of all, your complaints are about the buyer's agent. An advantage to having your own Realtor is that the fact you have made an offer and it is contingent on the sale of your home would never come to light (IMHO).

Second, please do not take offense, but how would you feel if a buyer came to you with an offer contingent upon the sale of their home? Your bargaining position is much stronger when you have fewer contingencies, particularly in this market.

Third, it is normal for there to be an inspection period. It is also normal for the inspections to result in more negotiating. That is WHY you have Professional Representation. I read a lot of emotion in your situation, which is understandable. However, if you had a Realtor representing you then THEY would be protecting your interesting and negotiating tough on your behalf.

Lastly, about comps. Comparable sales are a funny thing. You do not mention how long your home has been on the market, but just to help you understand the bigger picture: most homes that sell in the first 30 days sell for closest to asking price. Your home, it appears, has not had a lot of activity. A properly priced and marketed home will receive the most market activity (showings, website hits, broker calls) during the first two or three weeks.

In a buyer's market, I have seen sellers turn down offers that came in during this two to three week period, say that they are low offers, and then reject them. Only to learn a month or two later that those offers were actually fair.

I hope that this response is helpful. Should you have more information you can post a clairification. If in fact you DO have a listing agent, then our responses would be a little different.
0 votes Thank Flag Link Thu Mar 20, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
Sorry if it's not what you want to hear but that is what the option period is for. Time for which buyers can do whatever they want but you don't have to agree with it. You can turn down their request or counter. At the end of the option period, they can walk away, you will keep the option fee, they get their earnest money back.

It seems that they are not in good hands either. Their agent should have provided comps without them asking before writing an offer.
Web Reference: http://www.sumnerrealty.com
0 votes Thank Flag Link Thu Mar 20, 2008
hello. I am presently in the market for a home. Personally, I agree with you. Dirty pool...unless the lower offer is based on home inspection or appraiser findings. Good luck.
0 votes Thank Flag Link Thu Mar 20, 2008
Where is your real estate agent OR you doing a FSBO, you agent should be handling all this for you no stress to you

1) Some unseasoned agents DON'T know how to comp a house maybe your house is over the comp valued, I tend to know my market areas dont' show properties that I know are over priced that leads to many problems such as POSSIBLE in your situation. NOTE: A bank can't lend money on a property if the property does not appraise to that value amount of the executed contract

2) All properties are subject to inspection, most of the homes I instruct my seller to be prepared for the miscellanous items that the buyer will request UNLESS the property is marketed AS IS. I explain to my buyer or seller "pick on choose those battles" so all parties feel as though they have won. Much easier to do the minor work less than a few $100 dollars in most instances than NOT having a house sale.

3) I am unclear why a realtor would come back and drop the price unless there are other issues invovled. '

4) Your realtor normally in these instances the listing agent knows what agent have expressed interest immediately contacting those agents to come back and submit there offers

Sorry to hear what took place. Best of luck to you.
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Thu Mar 20, 2008
I agree with the previous answer. The first step is to discuss your situation with the Brokers involved and if there is sufficient evidence to show any wrong doing, mediation is usually the route to go. Should that not prove satisfactory, then it goes to arbitration.

Hope this helps.
Web Reference: http://www.PhilFowler.com
0 votes Thank Flag Link Thu Mar 20, 2008
Since the home is in the option period everything is negotiable. You accepted the offer and now they want to counter again. Sounds like the buyer's agent is only doing his job. His buyer wants to offer less and that is his right. You, of course, can refuse.
The buyers agent should have given his client all the info at the start, but this could just be a negotiation ploy. Buying or selling a home is very stressful as you know.
If you have the other offer as a backup then you could refuse any counters and hope the current buyer backs out.
Again this could back fire as the new buyer will have demands as well.
I would sit down with your agent and get a game plan going. That way you will be prepared and feel comfortable with any bumps in the road ahead.

About filing a complaint, The option period is just another time to renegotiate, so that is just what they are doing.
This is just my opionion. Since I don't know the whole story please ask your agent for more advice.
Good luck.
J.
0 votes Thank Flag Link Thu Mar 20, 2008
If the option period was for the buyer to take a longer look at your property than normal in your area, he would have paid you for that time that he purchase. That money goes to you if the property does not close, not the agent, because it bought the buyer more time to look around and inspect the property. If the house closes with that particular buyer, the option money is applied to the purchase. Usually, if the buyer purchases an option then he is free to walk away without losing his earnest money in the contract.

Repairs are a different agreement. There is usually an inspection period, then repair agreements between the buyer and seller. The buyer asks the seller to make certain repairs relative to inspections by licensed professionals who inspected the property and provided the buyer with a report. More than likely, any buyer will go through a house inspection and ask for some repairs. No house is perfect, not even a newly constructed one.

The repair list is negotiable. If you are represented by a listing agent, talk with them about the repairs. If you are for sale by owner, then you must decide on your own what would be your best course of action.

Hope this helps...
Web Reference: http://www.queencitygal.com
0 votes Thank Flag Link Thu Mar 20, 2008
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