Real Estate Inspection Question
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Real Estate Inspection Question
We entered into contract to sell our townhome and just received the requests as a result of the home inspection. The buyers are asking for $10,000 to replace the HVAC system as it is old and non-functioning, and they never would have offered their price had they known ($9K less than list, and the home was already priced aggressively). The units are actually functioning perfectly (interestingly, no copy of the inspection report was attached to their request). As far as the age of the system, they did not buy the place sight unseen and even a laymen could tell they were old.
I feel this is very underhanded, as they think they have leverage since we are just about moved out. My gut is to tell them we will have it certified operable by a professional HVAC person and that is it.
Has anyone had something similar to this happen you? How did you handle it? I would really appreciate advice or opinions
Thanks
I feel this is very underhanded, as they think they have leverage since we are just about moved out. My gut is to tell them we will have it certified operable by a professional HVAC person and that is it.
Has anyone had something similar to this happen you? How did you handle it? I would really appreciate advice or opinions
Thanks
Re: Real Estate Inspection Question
Your gut is correct. They are trying to get what they can.
Re: Real Estate Inspection Question
I would offer to have it inspected by a neutral HVAC professional.
If there is a problem, you fix it. If not, you don't.
Many homes are sold with a 1 year home warranty, which helps minimize this kinds of dispute. You may consider that as a potential solution if the seller is reluctant to move forward.
If there is a problem, you fix it. If not, you don't.
Many homes are sold with a 1 year home warranty, which helps minimize this kinds of dispute. You may consider that as a potential solution if the seller is reluctant to move forward.
Re: Real Estate Inspection Question
We had a similar experience with the roof, which was truly on its last legs. The house was priced aggressively for a quick sale, and the offer was low. Then the inspection "revealed" that the roof was old -- duh. We stuck to our guns and responded that the house was priced to reflect age and condition. They caved.
"have more than thou showest, |
speak less than thou knowest" -- The Fool in King Lear
- patriciamgr2
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Re: Real Estate Inspection Question
Read your real estate sales contract--(i) does it contain a provision that requires buyer to furnish a copy of the inspection report; (ii) are there any limits on the amount you are obligated to spend to remedy any problems? Buyers can lose their earnest money (is it significant $ amt?) if they are fabricating an inspection problem to avoid closing.
Ask your realtor to line up showings immediately for alternate buyers while at the same time demanding a copy of the signed inspection report The buyers are probably just trying a little hardball or they may be getting buyers' remorse--is the buyer an investor or are they indiduals who are committed to moving as well?
If the price reflected the property's condition, you should be able to sell it again. Unless you need $ from this closing to complete your new purchase, I wouldn't agree to more than a nominal adjustment. As other posters noted, you should politely explain your reasoning & emphasize what a great deal they're getting.
Ask your realtor to line up showings immediately for alternate buyers while at the same time demanding a copy of the signed inspection report The buyers are probably just trying a little hardball or they may be getting buyers' remorse--is the buyer an investor or are they indiduals who are committed to moving as well?
If the price reflected the property's condition, you should be able to sell it again. Unless you need $ from this closing to complete your new purchase, I wouldn't agree to more than a nominal adjustment. As other posters noted, you should politely explain your reasoning & emphasize what a great deal they're getting.
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Re: Real Estate Inspection Question
You're getting a lot of good responses. It's always a good idea not to pack or move anything until after the home inspection contingency is up.
Buyer could back out of the deal however they would lose their money for the home inspection time and possibly attorney fee.
If you really feel you sold it for a good price the buyer would probably feel the same and in turn move forward with the deal regardless of what you decide.
If you think the buyers are getting cold feet that could be an issue and there's not much you could do about that.
Perhaps you can ask that you meet halfway you give 5000 the buyer comes down 5000..
Without seeing the comps and what's considered good or what's considered bad I would not know if this is a good deal or a bad deal for you.. Amount of time on the market how many other people viewed it how many other offers did you get if any..
I hope it works out for you. If a buyer wants to buy and seller wants to sell there's not much that'll stop the deal from coming together
Buyer could back out of the deal however they would lose their money for the home inspection time and possibly attorney fee.
If you really feel you sold it for a good price the buyer would probably feel the same and in turn move forward with the deal regardless of what you decide.
If you think the buyers are getting cold feet that could be an issue and there's not much you could do about that.
Perhaps you can ask that you meet halfway you give 5000 the buyer comes down 5000..
Without seeing the comps and what's considered good or what's considered bad I would not know if this is a good deal or a bad deal for you.. Amount of time on the market how many other people viewed it how many other offers did you get if any..
I hope it works out for you. If a buyer wants to buy and seller wants to sell there's not much that'll stop the deal from coming together
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Re: Real Estate Inspection Question
Certainly demand to see a copy of the inspection report.
After they provide that, if they can, you must decide whether or not you will sell the house for less and if so, how much.
Normal for a buyer to try and get the cheapest price---not really great that they didn't attach the inspection report. Good luck!
After they provide that, if they can, you must decide whether or not you will sell the house for less and if so, how much.
Normal for a buyer to try and get the cheapest price---not really great that they didn't attach the inspection report. Good luck!
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Re: Real Estate Inspection Question
I disagree with some of the comments. The facts don't matter (if you have the usual sort of contract, which allows the buyer to back out after inspection). No point in seeing the inspection report, no point in getting a competing inspection.
This is a negotiation. State that the AC is in working condition. Make an appropriate counter offer. If you are in a strong position then make a token concession.
You don't know if the buyer is having second thoughts and is asking something unreasonable in hopes you will refuse. He doesn't know whether you are sitting on a better backup offer. Make a judgement call and take your chances.
This is a negotiation. State that the AC is in working condition. Make an appropriate counter offer. If you are in a strong position then make a token concession.
You don't know if the buyer is having second thoughts and is asking something unreasonable in hopes you will refuse. He doesn't know whether you are sitting on a better backup offer. Make a judgement call and take your chances.
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Re: Real Estate Inspection Question
I had a similar problem when I bought my current home. My inspector took off the front panels from the furnaces, inspected the insides, and then tested them. One on them did not work, and that is what his inspection report said.
The sellers were not happy, as it turned out that the inspector put one of the panels on upside down, and thus a safety microswitch did not make contact, preventing the furnace from coming on.
Perhaps something similar happened. Demonstrate that your HVAC system is in good working order, then see what happens.
Ralph
The sellers were not happy, as it turned out that the inspector put one of the panels on upside down, and thus a safety microswitch did not make contact, preventing the furnace from coming on.
Perhaps something similar happened. Demonstrate that your HVAC system is in good working order, then see what happens.
Ralph
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Re: Real Estate Inspection Question
This is why I always recommend that a seller do a pre-sale home inspection. Too often what is a good investigative tool for a property purchase is turned into a negotiating tool.
How is your market? How long has the property been on the market?
If you're in a hot market like mine you just counter with the "Home priced to reflect age" and move on.
If your property has been on the market for a while then you'll need to work with the buyer. I like the 50/50 approach.
How is your market? How long has the property been on the market?
If you're in a hot market like mine you just counter with the "Home priced to reflect age" and move on.
If your property has been on the market for a while then you'll need to work with the buyer. I like the 50/50 approach.
Every day I can hike is a good day.
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Re: Real Estate Inspection Question
Have a certified HVAC technician look at it. You need to have a degree sub-cool between a certain range and, also, a degree air split from the return air and supply air within a certain range, in order for your unit to be considered in proper working order. Regardless of age/efficiency, this is all you need. If everything checks out, tell buyers "price reflects age." The buyers are probably seeing what they can get.
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Re: Real Estate Inspection Question
I would move on.
John C. Bogle: “Simplicity is the master key to financial success."
Re: Real Estate Inspection Question
Unless you sell "as is" you are basically over a barrel once you pack up. Buyers know, once you pack up, load up, and are ready to move on, you can either take the "drop dead" price, or put it back on the market (which few wish to do).
When you list a house, you have to make it crystal clear the sale is "as is", "all cash", and "money up front." No contingencies. Anything less, you are setting yourself up to be screwed.
When I sold my (deceased) Mom's house, I made it clear the sale was "all of the above", and the estate sale (of all the furniture and personal property) would not occur until the sale was closed.
Hardball? Perhaps. But it worked.
The "spread" between the offers with contingencies and those with none was, like $15,000. No-brainer comes to mind.
Mind you, an "as is" sale in most states does not relieve you from disclosing all you know, but it should relieve you from disclosing what you don't (and could not reasonably) know.
When you list a house, you have to make it crystal clear the sale is "as is", "all cash", and "money up front." No contingencies. Anything less, you are setting yourself up to be screwed.
When I sold my (deceased) Mom's house, I made it clear the sale was "all of the above", and the estate sale (of all the furniture and personal property) would not occur until the sale was closed.
Hardball? Perhaps. But it worked.
The "spread" between the offers with contingencies and those with none was, like $15,000. No-brainer comes to mind.
Mind you, an "as is" sale in most states does not relieve you from disclosing all you know, but it should relieve you from disclosing what you don't (and could not reasonably) know.
- patriciamgr2
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Re: Real Estate Inspection Question
I would like to respectfully disagree with the idea of listing a non-estate property "as is". While common in REO or in estate sales (the decedent being the person who is in the best position to know of defects), IMO, it would send up a huge "red flag" in the real estate markets with which I am familiar in other sales. I'd be looking for mold, major structural damage or meth lab.
One solution (not in time for the OP, but for our future reference) is to tell the Buyer you'll keep showing the house until all contingencies are removed. In my local MLS, it's common to get a written back-up offer in place for short sales; I was the back up offer in a conventional deal where the sellers were afraid buyer wouldn't qualify. Local practice may vary.
As a seller, I also ask for high earnest money to be deposited within 5 days of the contract being signed. Also, in my current area it's common to limit the Seller's obligation to make any repairs in response to an inspection report to a low dollar amount. So, it's "take it or leave it" & unless the inspection report calls something a defect, personally I'd demand to keep the earnest money if they 'leave it".
Good Luck to the OP.
One solution (not in time for the OP, but for our future reference) is to tell the Buyer you'll keep showing the house until all contingencies are removed. In my local MLS, it's common to get a written back-up offer in place for short sales; I was the back up offer in a conventional deal where the sellers were afraid buyer wouldn't qualify. Local practice may vary.
As a seller, I also ask for high earnest money to be deposited within 5 days of the contract being signed. Also, in my current area it's common to limit the Seller's obligation to make any repairs in response to an inspection report to a low dollar amount. So, it's "take it or leave it" & unless the inspection report calls something a defect, personally I'd demand to keep the earnest money if they 'leave it".
Good Luck to the OP.
Re: Real Estate Inspection Question
If you're property was priced aggressively to begin with and you took an offer that was $10k below that, I would make note in the negotiations that a non-functioning HVAC was already priced into your listing.
My folks are selling their house and downsizing. their house is in need of new carpeting. However, the asking price already reflects the needed carpet. This sounds like the same thing you're going through. Relic A/C or not, your asking price reflects the needed work. The fact that you took an offer less than ask, gives you a better negotiating leg to stand on.
My folks are selling their house and downsizing. their house is in need of new carpeting. However, the asking price already reflects the needed carpet. This sounds like the same thing you're going through. Relic A/C or not, your asking price reflects the needed work. The fact that you took an offer less than ask, gives you a better negotiating leg to stand on.
What the bold print givith, the fine print taketh away. |
-meowcat
Re: Real Estate Inspection Question
Why would any well informed buyer want to make a large earnest money deposit before financing was approved and before an inspection or other contingencies are removed? I certainly wouldn't. Now all real estate is "local" and if that's how things work in your area, that's another matter. I think selling "as is" really means, I am not agreeing to make any repairs that may arise. Probably not the best approach in a buyers market though.patriciamgr2 wrote:I would like to respectfully disagree with the idea of listing a non-estate property "as is". While common in REO or in estate sales (the decedent being the person who is in the best position to know of defects), IMO, it would send up a huge "red flag" in the real estate markets with which I am familiar in other sales. I'd be looking for mold, major structural damage or meth lab.
One solution (not in time for the OP, but for our future reference) is to tell the Buyer you'll keep showing the house until all contingencies are removed. In my local MLS, it's common to get a written back-up offer in place for short sales; I was the back up offer in a conventional deal where the sellers were afraid buyer wouldn't qualify. Local practice may vary.
As a seller, I also ask for high earnest money to be deposited within 5 days of the contract being signed. Also, in my current area it's common to limit the Seller's obligation to make any repairs in response to an inspection report to a low dollar amount. So, it's "take it or leave it" & unless the inspection report calls something a defect, personally I'd demand to keep the earnest money if they 'leave it".
Good Luck to the OP.
Re: Real Estate Inspection Question
I agree with this. Almost all real estate contracts give the seller the right for the inspection upon request, but sometimes it's better not to know in case this deal falls through and a future buyer asks about known defects. If your place is priced competitively in a (warm/hot) market, stick to your guns and counter at the agreed upon price. Maybe make some small concession to show your good faith effort.adamthesmythe wrote:I disagree with some of the comments. The facts don't matter (if you have the usual sort of contract, which allows the buyer to back out after inspection). No point in seeing the inspection report, no point in getting a competing inspection.
This is a negotiation. State that the AC is in working condition. Make an appropriate counter offer. If you are in a strong position then make a token concession.
You don't know if the buyer is having second thoughts and is asking something unreasonable in hopes you will refuse. He doesn't know whether you are sitting on a better backup offer. Make a judgement call and take your chances.
Last edited by e5116 on Sat Jul 04, 2015 8:52 am, edited 1 time in total.
Re: Real Estate Inspection Question
Sellers are not responsible to make repairs after the sale, even if sold "as-is". I take as-is to mean that, yes, my house is in need of repair and I'm not fixing it before I sell it. Of course, my asking price reflects the needed repairs.
What the bold print givith, the fine print taketh away. |
-meowcat
- patriciamgr2
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Re: Real Estate Inspection Question
In connection with the thoughtful comments on my earlier suggestions:
1. Requiring an Additional Deposit (& designating it as part of Earnest Money Deposit by checking that box) within a few days after acceptance invariably prompts buyer to get the home inspection resolved quickly. That's a good thing, because Seller can easily circle around to others who were interested in the property if the Buyer walks early.
Financing contingencies not being met, in my experience, always allows return of EMD (including the addl amt) as long as the Buyer can demonstrate good faith attempts to obtain financing. Because in my area appraisals are what caused most financing "fails" I always asked my broker to work with the appraiser chosen by the lender & I always prepared a fact sheet listing every positive feature (with comp's gathered by realtor) for the appraiser. Nevertheless, if the Buyer really can't get financing, as a Seller, I wouldn't attempt to keep EMD.
2. The contract allows Seller to set a dollar limit on repairs he will make in response to an inspection report. I make that a low limit, so the Buyer understands that their decision after the home inspection is binary. Seller can refuse Buyer's repair/price adjustment requests in excess of that amount & still be acting in good faith. Buyer, of course, can terminate the contract. If the inspection report recognizes their complaint as a defect--IMO, Buyer gets to cancel contract and get EMD refunded. If the inspection report just notes age, and that was disclosed in the listing (which typically describe age of building) or was otherwise evident at the time of Acceptance of the Contract--IMO, return of the EMD is questionable.
I would ask my realtor to make it clear to Buyer's agent--at the time offer is accepted--that Seller is serious about the inspection not representing an opportunity to re-open price negotiations.
3. The repairs we are talking about are pre-closing. IMO, a Seller isn't required to do repairs after closing unless there has been a misrepresentation. In many states, selling the property "As Is" doesn't remove disclosure obligations about known risks for anyone who has occupied or maintained the property.
4. In response to posters who felt it was unnecessary to request a copy of the inspection report: I would want a copy even if I terminate the contract & refund Buyer's EMD. Seller, IMO, would be required to disclose defects identified by the report--refusing to get a copy doesn't seem likely to allow the Seller to evade that responsibility. Just my opinion; plus, I tend to err on the side of making full disclosure.
Good Luck to all in real estate transactions. I'm headed off for July 4 boatride & lunch. Happy 4th to all Forum members!
1. Requiring an Additional Deposit (& designating it as part of Earnest Money Deposit by checking that box) within a few days after acceptance invariably prompts buyer to get the home inspection resolved quickly. That's a good thing, because Seller can easily circle around to others who were interested in the property if the Buyer walks early.
Financing contingencies not being met, in my experience, always allows return of EMD (including the addl amt) as long as the Buyer can demonstrate good faith attempts to obtain financing. Because in my area appraisals are what caused most financing "fails" I always asked my broker to work with the appraiser chosen by the lender & I always prepared a fact sheet listing every positive feature (with comp's gathered by realtor) for the appraiser. Nevertheless, if the Buyer really can't get financing, as a Seller, I wouldn't attempt to keep EMD.
2. The contract allows Seller to set a dollar limit on repairs he will make in response to an inspection report. I make that a low limit, so the Buyer understands that their decision after the home inspection is binary. Seller can refuse Buyer's repair/price adjustment requests in excess of that amount & still be acting in good faith. Buyer, of course, can terminate the contract. If the inspection report recognizes their complaint as a defect--IMO, Buyer gets to cancel contract and get EMD refunded. If the inspection report just notes age, and that was disclosed in the listing (which typically describe age of building) or was otherwise evident at the time of Acceptance of the Contract--IMO, return of the EMD is questionable.
I would ask my realtor to make it clear to Buyer's agent--at the time offer is accepted--that Seller is serious about the inspection not representing an opportunity to re-open price negotiations.
3. The repairs we are talking about are pre-closing. IMO, a Seller isn't required to do repairs after closing unless there has been a misrepresentation. In many states, selling the property "As Is" doesn't remove disclosure obligations about known risks for anyone who has occupied or maintained the property.
4. In response to posters who felt it was unnecessary to request a copy of the inspection report: I would want a copy even if I terminate the contract & refund Buyer's EMD. Seller, IMO, would be required to disclose defects identified by the report--refusing to get a copy doesn't seem likely to allow the Seller to evade that responsibility. Just my opinion; plus, I tend to err on the side of making full disclosure.
Good Luck to all in real estate transactions. I'm headed off for July 4 boatride & lunch. Happy 4th to all Forum members!