Navigating the Appraisal and Inspection as a Seller

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gasdoc
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Navigating the Appraisal and Inspection as a Seller

Post by gasdoc » Tue Apr 23, 2019 2:48 pm

I have learned a ton on this forum and have benefitted greatly from advice in the past, so here we go again....

I am helping an 80 year old relative sell her home, as she has recently moved to a senior apartment. The home was built in the 50's, and has had little updating over those years. It has never had the electrical or plumbing systems updated, and does not even have central air. The asking price was $149K, and after 24 hours on the market, we accepted the best offer of the ten we received, an offer of $160K. It was difficult choosing the best offer, because all ten offers were within $10K. All of the offers were contingent on a satisfactory appraisal and home inspection. I am looking for advice on negotiating these two aspects of selling this older home. I live in a different state, and the relative certainly is not interested in doing major repairs. (Repairs could be hired out, of course.) Any advice from practical experience or current realtors is appreciated.

gasdoc

barnaclebob
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Re: Navigating the Appraisal and Inspection as a Seller

Post by barnaclebob » Tue Apr 23, 2019 2:55 pm

Its all dependant on what the reports say or if the buyer asks for anything. Sit tight and hope for the best until then.

If you arent interested in repairs then you can tell the seller you had 9 other offers and wont be doing anything or you can give them a credit at closing for an appropriate amount.

stan1
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Re: Navigating the Appraisal and Inspection as a Seller

Post by stan1 » Tue Apr 23, 2019 3:00 pm

Have your realtor ask for backup offers from the other bidders and try to get at least one agreed to in writing. If the selected buyer asks for the world to lift the inspection report let them know you have a backup offer and are willing to bail out if they make too many demands for repairs.

If it doesn't appraise that's a harder problem. At that price range its quite possible the buyers won't have an extra $10-20K to put into it. Realistically you'd probably end up having to drop the price down to the appraised value. I'm assuming you didn't reject an offer that had a very high down payment or was all cash.

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gasdoc
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Re: Navigating the Appraisal and Inspection as a Seller

Post by gasdoc » Tue Apr 23, 2019 3:09 pm

stan1 wrote:
Tue Apr 23, 2019 3:00 pm
Have your realtor ask for backup offers from the other bidders and try to get at least one agreed to in writing. If the selected buyer asks for the world to lift the inspection report let them know you have a backup offer and are willing to bail out if they make too many demands for repairs.

If it doesn't appraise that's a harder problem. At that price range its quite possible the buyers won't have an extra $10-20K to put into it. Realistically you'd probably end up having to drop the price down to the appraised value. I'm assuming you didn't reject an offer that had a very high down payment or was all cash.
What exactly does it mean to have at least one backup offer agreed to in writing? There were certainly other similar offers, but the house was being shown so frequently and offers being made that we had to put in a deadline for offers.

I agree that buyers won't have an extra $10=-$20K if the appraisal comes in low. All of the offers seemed to have been from first time home buyers. Personally, I doubt the house will appraise for more than the asking price of $149K, but I think the buyers got caught up in the bidding war. Now that we are essentially down to one possibly overextended buyer, I am concerned. And no, none of the buyers were "all cash," or even high down payment offers. All were in the 5% down range.

gasdoc

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Phineas J. Whoopee
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Re: Navigating the Appraisal and Inspection as a Seller

Post by Phineas J. Whoopee » Tue Apr 23, 2019 3:22 pm

The buyer, at least in many jurisdictions, is entitled to an inspection by an inspector of their choice, at their cost, at some point in the process. Nothing stops the seller from choosing an inspector, and I would suggest paying for a licensed, bonded, and professional one who does just that, to find out what's wrong, although then they'd be required to report known issues to the buyer. It isn't if the buyer's professional inspector wouldn't notice them anyway.

Should the buyer not be satisfied with the results of the inspection the seller could offer a price concession, in lieu of having the problems repaired.

I'm not giving advice about what your relative should do, just pointing out possibilities.

PJW

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Re: Navigating the Appraisal and Inspection as a Seller

Post by gasdoc » Tue Apr 23, 2019 4:49 pm

Phineas J. Whoopee wrote:
Tue Apr 23, 2019 3:22 pm
The buyer, at least in many jurisdictions, is entitled to an inspection by an inspector of their choice, at their cost, at some point in the process. Nothing stops the seller from choosing an inspector, and I would suggest paying for a licensed, bonded, and professional one who does just that, to find out what's wrong, although then they'd be required to report known issues to the buyer. It isn't if the buyer's professional inspector wouldn't notice them anyway.

Should the buyer not be satisfied with the results of the inspection the seller could offer a price concession, in lieu of having the problems repaired.

I'm not giving advice about what your relative should do, just pointing out possibilities.

PJW
Thank you.

gasdoc

megabad
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Re: Navigating the Appraisal and Inspection as a Seller

Post by megabad » Tue Apr 23, 2019 5:10 pm

gasdoc wrote:
Tue Apr 23, 2019 2:48 pm
I have learned a ton on this forum and have benefitted greatly from advice in the past, so here we go again....

I am helping an 80 year old relative sell her home, as she has recently moved to a senior apartment. The home was built in the 50's, and has had little updating over those years. It has never had the electrical or plumbing systems updated, and does not even have central air. The asking price was $149K, and after 24 hours on the market, we accepted the best offer of the ten we received, an offer of $160K. It was difficult choosing the best offer, because all ten offers were within $10K. All of the offers were contingent on a satisfactory appraisal and home inspection. I am looking for advice on negotiating these two aspects of selling this older home. I live in a different state, and the relative certainly is not interested in doing major repairs. (Repairs could be hired out, of course.) Any advice from practical experience or current realtors is appreciated.

gasdoc
On the plus side, the seller doesn't have to navigate the appraisal or inspection as the seller has nothing to do with these things. Since they are out of relative's control, I wouldn't worry much until you see the results. In my experience, unless you sell a house as "as-is" a buyer will almost always ask for some repairs on any house be it older, newer, or somewhere in between. Some of these can be accomplished by a local handyman type worker. Everything is a negotiation. If time is an issue, and you don't think it will appraise, you can offer a credit to cover the requested repairs instead of repairing anything.

Additionally, I have never been able to predict an appraisal as they appear to be completely random and there is very little logic surrounding them. I think they will generally be close to what you think the going rate is, but a 10-20% swing should not be alarming so be ready for that. This would lead to another round of negotiating, but still shouldn't be anything major to worry about. A good realtor will help ease nerves extraordinarily in cases like these. Sellers, just like buyers, should avoid emotional attachment to the process to help ensure a fruitful and less stressful process.

boogiehead
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Re: Navigating the Appraisal and Inspection as a Seller

Post by boogiehead » Tue Apr 23, 2019 5:37 pm

gasdoc wrote:
Tue Apr 23, 2019 2:48 pm
I have learned a ton on this forum and have benefitted greatly from advice in the past, so here we go again....

I am helping an 80 year old relative sell her home, as she has recently moved to a senior apartment. The home was built in the 50's, and has had little updating over those years. It has never had the electrical or plumbing systems updated, and does not even have central air. The asking price was $149K, and after 24 hours on the market, we accepted the best offer of the ten we received, an offer of $160K. It was difficult choosing the best offer, because all ten offers were within $10K. All of the offers were contingent on a satisfactory appraisal and home inspection. I am looking for advice on negotiating these two aspects of selling this older home. I live in a different state, and the relative certainly is not interested in doing major repairs. (Repairs could be hired out, of course.) Any advice from practical experience or current realtors is appreciated.

gasdoc
When the offers were given... did your agent talk to any of the buyer's agent? Usually you can get a general feel on how enthusiastic or set the buyer is with the property especially if you let them know you have multiple offers and during that time you probably could have given them a heads up that you do not intend on doing any major repair to get their reactions. Also did you have any cash offers, if so the appraisal contingency would be unnecessary.

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gasdoc
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Re: Navigating the Appraisal and Inspection as a Seller

Post by gasdoc » Tue Apr 23, 2019 5:53 pm

megabad wrote:
Tue Apr 23, 2019 5:10 pm
gasdoc wrote:
Tue Apr 23, 2019 2:48 pm
I have learned a ton on this forum and have benefitted greatly from advice in the past, so here we go again....

I am helping an 80 year old relative sell her home, as she has recently moved to a senior apartment. The home was built in the 50's, and has had little updating over those years. It has never had the electrical or plumbing systems updated, and does not even have central air. The asking price was $149K, and after 24 hours on the market, we accepted the best offer of the ten we received, an offer of $160K. It was difficult choosing the best offer, because all ten offers were within $10K. All of the offers were contingent on a satisfactory appraisal and home inspection. I am looking for advice on negotiating these two aspects of selling this older home. I live in a different state, and the relative certainly is not interested in doing major repairs. (Repairs could be hired out, of course.) Any advice from practical experience or current realtors is appreciated.

gasdoc
On the plus side, the seller doesn't have to navigate the appraisal or inspection as the seller has nothing to do with these things. Since they are out of relative's control, I wouldn't worry much until you see the results. In my experience, unless you sell a house as "as-is" a buyer will almost always ask for some repairs on any house be it older, newer, or somewhere in between. Some of these can be accomplished by a local handyman type worker. Everything is a negotiation. If time is an issue, and you don't think it will appraise, you can offer a credit to cover the requested repairs instead of repairing anything.

Additionally, I have never been able to predict an appraisal as they appear to be completely random and there is very little logic surrounding them. I think they will generally be close to what you think the going rate is, but a 10-20% swing should not be alarming so be ready for that. This would lead to another round of negotiating, but still shouldn't be anything major to worry about. A good realtor will help ease nerves extraordinarily in cases like these. Sellers, just like buyers, should avoid emotional attachment to the process to help ensure a fruitful and less stressful process.
Thank you.

gasdoc

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gasdoc
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Re: Navigating the Appraisal and Inspection as a Seller

Post by gasdoc » Tue Apr 23, 2019 5:55 pm

boogiehead wrote:
Tue Apr 23, 2019 5:37 pm
gasdoc wrote:
Tue Apr 23, 2019 2:48 pm
I have learned a ton on this forum and have benefitted greatly from advice in the past, so here we go again....

I am helping an 80 year old relative sell her home, as she has recently moved to a senior apartment. The home was built in the 50's, and has had little updating over those years. It has never had the electrical or plumbing systems updated, and does not even have central air. The asking price was $149K, and after 24 hours on the market, we accepted the best offer of the ten we received, an offer of $160K. It was difficult choosing the best offer, because all ten offers were within $10K. All of the offers were contingent on a satisfactory appraisal and home inspection. I am looking for advice on negotiating these two aspects of selling this older home. I live in a different state, and the relative certainly is not interested in doing major repairs. (Repairs could be hired out, of course.) Any advice from practical experience or current realtors is appreciated.

gasdoc
When the offers were given... did your agent talk to any of the buyer's agent? Usually you can get a general feel on how enthusiastic or set the buyer is with the property especially if you let them know you have multiple offers and during that time you probably could have given them a heads up that you do not intend on doing any major repair to get their reactions. Also did you have any cash offers, if so the appraisal contingency would be unnecessary.
Yes, our agent did talk to the other agents, a couple of times each, because of the enthusiasm of the bidding. This agent for the offer we accepted texted our agent a couple of hours after the offer asking how things were going. The buyer also sent a hand written note saying how badly she wants the house- about how she has been looking for a home near her elderly parents' home.

gasdoc

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Re: Navigating the Appraisal and Inspection as a Seller

Post by gasdoc » Tue Apr 23, 2019 5:56 pm

boogiehead wrote:
Tue Apr 23, 2019 5:37 pm
gasdoc wrote:
Tue Apr 23, 2019 2:48 pm
I have learned a ton on this forum and have benefitted greatly from advice in the past, so here we go again....

I am helping an 80 year old relative sell her home, as she has recently moved to a senior apartment. The home was built in the 50's, and has had little updating over those years. It has never had the electrical or plumbing systems updated, and does not even have central air. The asking price was $149K, and after 24 hours on the market, we accepted the best offer of the ten we received, an offer of $160K. It was difficult choosing the best offer, because all ten offers were within $10K. All of the offers were contingent on a satisfactory appraisal and home inspection. I am looking for advice on negotiating these two aspects of selling this older home. I live in a different state, and the relative certainly is not interested in doing major repairs. (Repairs could be hired out, of course.) Any advice from practical experience or current realtors is appreciated.

gasdoc
When the offers were given... did your agent talk to any of the buyer's agent? Usually you can get a general feel on how enthusiastic or set the buyer is with the property especially if you let them know you have multiple offers and during that time you probably could have given them a heads up that you do not intend on doing any major repair to get their reactions. Also did you have any cash offers, if so the appraisal contingency would be unnecessary.
We had no cash offers- all were around 5% down, all first time homebuyers as best we could tell.

gasdoc

quantAndHold
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Re: Navigating the Appraisal and Inspection as a Seller

Post by quantAndHold » Tue Apr 23, 2019 6:01 pm

Your relative has a realtor, correct? Managing situations like this is how they make their money.

With that many offers, the seller holds all the cards. The buyer can inspect, but if they ask for repairs or price concessions, the seller can just move on and sell to someone else, and the buyer, or at least the buyer’s realtor, knows this. So I wouldn’t expect a buyer to ask for much.

With ten offers all in the same ballpark, I expect it will appraise just fine. If it doesn’t, though, then the realtor should be able to handle the negotiations. At worst, your relative will get whatever it appraises for.

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Re: Navigating the Appraisal and Inspection as a Seller

Post by gasdoc » Tue Apr 23, 2019 6:24 pm

quantAndHold wrote:
Tue Apr 23, 2019 6:01 pm
Your relative has a realtor, correct? Managing situations like this is how they make their money.

With that many offers, the seller holds all the cards. The buyer can inspect, but if they ask for repairs or price concessions, the seller can just move on and sell to someone else, and the buyer, or at least the buyer’s realtor, knows this. So I wouldn’t expect a buyer to ask for much.

With ten offers all in the same ballpark, I expect it will appraise just fine. If it doesn’t, though, then the realtor should be able to handle the negotiations. At worst, your relative will get whatever it appraises for.
Yes, she has a realtor, and from what I can tell, a fairly decent one. I felt like she got the buyers to quickly offer top offers without a lot of back and forth. Both the agents for buyers and sellers seemed to understand that there were multiple people interested in the property. I thought it was odd that there were no low offers. We will certainly use her guidance.

gasdoc

WhyNotUs
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Re: Navigating the Appraisal and Inspection as a Seller

Post by WhyNotUs » Tue Apr 23, 2019 7:08 pm

Inspections- Fix things are that meaningful but relatively easy and quick. Offer price discount for items that need more lead time or you don't have capacity to deal with. Non-meaningful or trivial share with buyer that you feel these items are observations from the inspector that the buyer can choose to fix or not over time but that you feel are normal condition to the price and similar home sales.

If one is borrowing 95%, they may need you to put the funds for larger projects into escrow so that they are part of the mortgage. When we sold my mom's house we put $9,000 for a new roof into escrow and the new owners could draw on them for the new roof. They were also tight on cash and borrowing the max allowed.

Price- not too many choices here. If the appraisal comes in below $160k and the buyer has no more cash then you can certainly take it down to $149 since that was your original price. Getting a deal done has some value.

Given the level of interest, you could relist it but it would be nice to be done with it.
I own the next hot stock- VTSAX

stan1
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Re: Navigating the Appraisal and Inspection as a Seller

Post by stan1 » Tue Apr 23, 2019 7:28 pm

gasdoc wrote:
Tue Apr 23, 2019 3:09 pm
stan1 wrote:
Tue Apr 23, 2019 3:00 pm
Have your realtor ask for backup offers from the other bidders and try to get at least one agreed to in writing. If the selected buyer asks for the world to lift the inspection report let them know you have a backup offer and are willing to bail out if they make too many demands for repairs.

If it doesn't appraise that's a harder problem. At that price range its quite possible the buyers won't have an extra $10-20K to put into it. Realistically you'd probably end up having to drop the price down to the appraised value. I'm assuming you didn't reject an offer that had a very high down payment or was all cash.
What exactly does it mean to have at least one backup offer agreed to in writing? There were certainly other similar offers, but the house was being shown so frequently and offers being made that we had to put in a deadline for offers.

I agree that buyers won't have an extra $10=-$20K if the appraisal comes in low. All of the offers seemed to have been from first time home buyers. Personally, I doubt the house will appraise for more than the asking price of $149K, but I think the buyers got caught up in the bidding war. Now that we are essentially down to one possibly overextended buyer, I am concerned. And no, none of the buyers were "all cash," or even high down payment offers. All were in the 5% down range.

gasdoc

Backup Offer:
https://www.redfin.com/resources/backup-offer

It means one of the bidders who didn't win goes further and submits an offer which is accepted as a backup. Backup may go so far as to start lining up financing. You can use it as leverage if the buyer under contract gets too demanding but still wants the house, and easily switch to the backup offer without losing too much time.

Another thing I'd do as a seller is wait for all of the inspections (home, insects, septic, sewer, well, roof, etc.) and the appraisal to come in and renegotiate once instead of one by one.

btenny
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Re: Navigating the Appraisal and Inspection as a Seller

Post by btenny » Tue Apr 23, 2019 7:42 pm

Inspections are required and usually informative. But they also review real problems and some nitpics. You have to fix them or negotiate the price to fix them. It usually is just time consuming. But sometimes issues like an old roof can be complicated when the buyer wants too much money or a new roof.

Appraisals are just a PIA. Mortgage lenders require a valuation bigger than the loan. This is trouble if the buyer does not have enough money to cover a low appraisal. It is best to require a buyer to not use the appraisal as a contingency. So ask your real estate person to get a appraisal waiver now. If the buyer says no. Go to a second buyer that will orequire get that second buyer lined up now in case of a low appraisal.

Good Luck.

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gasdoc
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Re: Navigating the Appraisal and Inspection as a Seller

Post by gasdoc » Tue Apr 23, 2019 7:59 pm

stan1 wrote:
Tue Apr 23, 2019 7:28 pm
gasdoc wrote:
Tue Apr 23, 2019 3:09 pm
stan1 wrote:
Tue Apr 23, 2019 3:00 pm
Have your realtor ask for backup offers from the other bidders and try to get at least one agreed to in writing. If the selected buyer asks for the world to lift the inspection report let them know you have a backup offer and are willing to bail out if they make too many demands for repairs.

If it doesn't appraise that's a harder problem. At that price range its quite possible the buyers won't have an extra $10-20K to put into it. Realistically you'd probably end up having to drop the price down to the appraised value. I'm assuming you didn't reject an offer that had a very high down payment or was all cash.
What exactly does it mean to have at least one backup offer agreed to in writing? There were certainly other similar offers, but the house was being shown so frequently and offers being made that we had to put in a deadline for offers.

I agree that buyers won't have an extra $10=-$20K if the appraisal comes in low. All of the offers seemed to have been from first time home buyers. Personally, I doubt the house will appraise for more than the asking price of $149K, but I think the buyers got caught up in the bidding war. Now that we are essentially down to one possibly overextended buyer, I am concerned. And no, none of the buyers were "all cash," or even high down payment offers. All were in the 5% down range.

gasdoc

Backup Offer:
https://www.redfin.com/resources/backup-offer

It means one of the bidders who didn't win goes further and submits an offer which is accepted as a backup. Backup may go so far as to start lining up financing. You can use it as leverage if the buyer under contract gets too demanding but still wants the house, and easily switch to the backup offer without losing too much time.

Another thing I'd do as a seller is wait for all of the inspections (home, insects, septic, sewer, well, roof, etc.) and the appraisal to come in and renegotiate once instead of one by one.
I just emailed our agent, and asked about the possibility of getting backup offers. Thanks.

gasdoc

chessknt
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Re: Navigating the Appraisal and Inspection as a Seller

Post by chessknt » Tue Apr 23, 2019 9:10 pm

Does anyone have experience with inspection related issues and disclosures? Like if a seller does not want to be made aware of a problem found on a buyer's inspection is it reasonable to reject a copy of the report so you are not forced to disclose something in the report (whether it is valid or not) in the event that the buyer pulls out?

adamthesmythe
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Re: Navigating the Appraisal and Inspection as a Seller

Post by adamthesmythe » Tue Apr 23, 2019 9:33 pm

Nothing to do until the reports come back.

Relax and try not to get emotional when they do. Most of the time things work out. You are in a good position if you received multiple offers.

BobTexas
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Re: Navigating the Appraisal and Inspection as a Seller

Post by BobTexas » Tue Apr 23, 2019 9:57 pm

gasdoc wrote:
Tue Apr 23, 2019 2:48 pm
I have learned a ton on this forum and have benefitted greatly from advice in the past, so here we go again....

I am helping an 80 year old relative sell her home, as she has recently moved to a senior apartment. The home was built in the 50's, and has had little updating over those years. It has never had the electrical or plumbing systems updated, and does not even have central air. The asking price was $149K, and after 24 hours on the market, we accepted the best offer of the ten we received, an offer of $160K. It was difficult choosing the best offer, because all ten offers were within $10K. All of the offers were contingent on a satisfactory appraisal and home inspection. I am looking for advice on negotiating these two aspects of selling this older home. I live in a different state, and the relative certainly is not interested in doing major repairs. (Repairs could be hired out, of course.) Any advice from practical experience or current realtors is appreciated.

gasdoc
It’s probably too late now, but if you received 10 offers all over asking price the first weekend you listed it too low

When listing homes it helps to question the agent carefully and look at comparable homes. The real estate agent is incented to sell quickly, not necessarily for the best price

If I remember correctly the book Freakonomics had a good study on this(good book by the way)

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Re: Navigating the Appraisal and Inspection as a Seller

Post by gasdoc » Wed Apr 24, 2019 6:02 am

BobTexas wrote:
Tue Apr 23, 2019 9:57 pm
gasdoc wrote:
Tue Apr 23, 2019 2:48 pm
I have learned a ton on this forum and have benefitted greatly from advice in the past, so here we go again....

I am helping an 80 year old relative sell her home, as she has recently moved to a senior apartment. The home was built in the 50's, and has had little updating over those years. It has never had the electrical or plumbing systems updated, and does not even have central air. The asking price was $149K, and after 24 hours on the market, we accepted the best offer of the ten we received, an offer of $160K. It was difficult choosing the best offer, because all ten offers were within $10K. All of the offers were contingent on a satisfactory appraisal and home inspection. I am looking for advice on negotiating these two aspects of selling this older home. I live in a different state, and the relative certainly is not interested in doing major repairs. (Repairs could be hired out, of course.) Any advice from practical experience or current realtors is appreciated.

gasdoc
It’s probably too late now, but if you received 10 offers all over asking price the first weekend you listed it too low

When listing homes it helps to question the agent carefully and look at comparable homes. The real estate agent is incented to sell quickly, not necessarily for the best price

If I remember correctly the book Freakonomics had a good study on this(good book by the way)
It was possibly listed too low, but I don't think so. I am not sure the appraisal will be as high as the offers. There just was a "frenzy" in terms of showings, with multiple agents showing the house at the same time, on day one, that seemed to up the ante. There were plenty of comparables, but the comparables were in much better shape, with updated kitchens and baths. We felt we had to allow for that. We also wanted the house to show and sell quickly due to the person's finances (not able to absorb paying rent for long without the proceeds from the house- she was on a waiting list and was offered an apartment way earlier than expected).

gasdoc

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Re: Navigating the Appraisal and Inspection as a Seller

Post by jfn111 » Wed Apr 24, 2019 7:06 am

stan1 wrote:
Tue Apr 23, 2019 7:28 pm
gasdoc wrote:
Tue Apr 23, 2019 3:09 pm
stan1 wrote:
Tue Apr 23, 2019 3:00 pm
Have your realtor ask for backup offers from the other bidders and try to get at least one agreed to in writing. If the selected buyer asks for the world to lift the inspection report let them know you have a backup offer and are willing to bail out if they make too many demands for repairs.

If it doesn't appraise that's a harder problem. At that price range its quite possible the buyers won't have an extra $10-20K to put into it. Realistically you'd probably end up having to drop the price down to the appraised value. I'm assuming you didn't reject an offer that had a very high down payment or was all cash.
What exactly does it mean to have at least one backup offer agreed to in writing? There were certainly other similar offers, but the house was being shown so frequently and offers being made that we had to put in a deadline for offers.

I agree that buyers won't have an extra $10=-$20K if the appraisal comes in low. All of the offers seemed to have been from first time home buyers. Personally, I doubt the house will appraise for more than the asking price of $149K, but I think the buyers got caught up in the bidding war. Now that we are essentially down to one possibly overextended buyer, I am concerned. And no, none of the buyers were "all cash," or even high down payment offers. All were in the 5% down range.

gasdoc

Backup Offer:
https://www.redfin.com/resources/backup-offer

It means one of the bidders who didn't win goes further and submits an offer which is accepted as a backup. Backup may go so far as to start lining up financing. You can use it as leverage if the buyer under contract gets too demanding but still wants the house, and easily switch to the backup offer without losing too much time.

Another thing I'd do as a seller is wait for all of the inspections (home, insects, septic, sewer, well, roof, etc.) and the appraisal to come in and renegotiate once instead of one by one.
They may do things differently in your state but here in MN the Inspection period is 10 days. Most lenders wont order the appraisal until the house has cleared Inspection.(Why waste $500 or so bucks on the appraisal if your not going to buy the house).
If the Buyers are using an FHA loan (or DVA) the FHA appraisal will include things specific to FHA like peeling paint, roof condition, HVAC in working order and windows in working order. If any deficiencies are found you generally can't escrow, the repairs need to be made and the house re-inspected.
If the Buyers are using conventional financing you have more options.

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Re: Navigating the Appraisal and Inspection as a Seller

Post by jfn111 » Wed Apr 24, 2019 7:08 am

chessknt wrote:
Tue Apr 23, 2019 9:10 pm
Does anyone have experience with inspection related issues and disclosures? Like if a seller does not want to be made aware of a problem found on a buyer's inspection is it reasonable to reject a copy of the report so you are not forced to disclose something in the report (whether it is valid or not) in the event that the buyer pulls out?
This happens all the time. We never allow the buyer's agent to send us the inspection report.

stan1
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Re: Navigating the Appraisal and Inspection as a Seller

Post by stan1 » Wed Apr 24, 2019 7:20 am

jfn111 wrote:
Wed Apr 24, 2019 7:06 am

They may do things differently in your state but here in MN the Inspection period is 10 days. Most lenders wont order the appraisal until the house has cleared Inspection.(Why waste $500 or so bucks on the appraisal if your not going to buy the house).
If the Buyers are using an FHA loan (or DVA) the FHA appraisal will include things specific to FHA like peeling paint, roof condition, HVAC in working order and windows in working order. If any deficiencies are found you generally can't escrow, the repairs need to be made and the house re-inspected.
If the Buyers are using conventional financing you have more options.
Good point, definitely the appraisal and inspection are done in parallel in some states to get a 30 day close. I suppose if all parties knew they were sequential and everyone made sure the inspections got done before the appraisal started everything would get done most of the time. Multiple rounds of negotiations seem to benefit the buyer not the seller most of the time.

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Re: Navigating the Appraisal and Inspection as a Seller

Post by rich126 » Wed Apr 24, 2019 7:32 am

btenny wrote:
Tue Apr 23, 2019 7:42 pm
Inspections are required and usually informative. But they also review real problems and some nitpics. You have to fix them or negotiate the price to fix them. It usually is just time consuming. But sometimes issues like an old roof can be complicated when the buyer wants too much money or a new roof.
There is usually no requirement that the seller has to do anything after a home inspection. The buyer can ask for money, for the seller to fix things, etc. but the seller is rarely required to do anything. Of course then the buyer has the option to withdraw their offer.

Personally with that many offers I would have asked if any of the buyers would have agreed to taking the house "as is" and bypass the inspection. Now certain forms of loans may not allow that but it certainly is an option.

I sold a house back in 2003 during a very hot market (multiple offers and over the listing price) and while the inspection came back with a bunch of stuff, I don't think I agreed to anything or just gave a token $500 or something.

Some buyers of older homes seem to have unrealistic expectations of the house. It isn't going to be in new like condition.

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gasdoc
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Re: Navigating the Appraisal and Inspection as a Seller

Post by gasdoc » Wed Apr 24, 2019 7:51 am

rich126 wrote:
Wed Apr 24, 2019 7:32 am
btenny wrote:
Tue Apr 23, 2019 7:42 pm
Inspections are required and usually informative. But they also review real problems and some nitpics. You have to fix them or negotiate the price to fix them. It usually is just time consuming. But sometimes issues like an old roof can be complicated when the buyer wants too much money or a new roof.
There is usually no requirement that the seller has to do anything after a home inspection. The buyer can ask for money, for the seller to fix things, etc. but the seller is rarely required to do anything. Of course then the buyer has the option to withdraw their offer.

Personally with that many offers I would have asked if any of the buyers would have agreed to taking the house "as is" and bypass the inspection. Now certain forms of loans may not allow that but it certainly is an option.

I sold a house back in 2003 during a very hot market (multiple offers and over the listing price) and while the inspection came back with a bunch of stuff, I don't think I agreed to anything or just gave a token $500 or something.

Some buyers of older homes seem to have unrealistic expectations of the house. It isn't going to be in new like condition.
After the offers were received, we discussed asking for "as is" as counter-offers, but decided against it- concerned that it would appear that we were covering something up as it is clearly an older house which has not been updated. To clarify an above statement, we only accepted conventional loans on the recommendation of our agent. The house is located in Wisconsin.

gasdoc

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Re: Navigating the Appraisal and Inspection as a Seller

Post by Doohop65 » Wed Apr 24, 2019 7:58 am

You are probably past the point of this mattering but be careful who the financing is through, especially with older houses. I sold my first home to a couple with a small down payment and they had a loan through FHA.

The standards that were required to be met were ridiculous and we were nickel and dimed. You won’t have a choice in negotiations as the standard will be required to be met to close the loan. At the time it was a poor housing market so we had to play ball but they wielded those requirements like a sword. I will never sell to anyone with an FHA loan again if I have a choice.

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Re: Navigating the Appraisal and Inspection as a Seller

Post by gasdoc » Wed Apr 24, 2019 8:06 am

Doohop65 wrote:
Wed Apr 24, 2019 7:58 am
You are probably past the point of this mattering but be careful who the financing is through, especially with older houses. I sold my first home to a couple with a small down payment and they had a loan through FHA.

The standards that were required to be met were ridiculous and we were nickel and dimed. You won’t have a choice in negotiations as the standard will be required to be met to close the loan. At the time it was a poor housing market so we had to play ball but they wielded those requirements like a sword. I will never sell to anyone with an FHA loan again if I have a choice.
Yup. I mentioned above that we threw out the FHA offers. I didn't know but the realtor gave us a heads-up.

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Re: Navigating the Appraisal and Inspection as a Seller

Post by Rudedog » Wed Apr 24, 2019 8:20 am

If the inspection turns up anything, lean on your realtor to help you to determine what really needs to be done, what is fair. The realtor should help you with a budget and a plan to get things done. Finally, remember, you are selling a used house, its not going to be in mint condition, even though the buyer may want it to be. Don't be afraid to tell the buyer "no". The last house we sold, the buyer had it inspected and asked for two minor items to be fixed, it took me about $ 10 in materials and a half hour to fix. The buyer never showed us the inspection report.

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Re: Navigating the Appraisal and Inspection as a Seller

Post by gasdoc » Wed Apr 24, 2019 9:22 am

Rudedog wrote:
Wed Apr 24, 2019 8:20 am
If the inspection turns up anything, lean on your realtor to help you to determine what really needs to be done, what is fair. The realtor should help you with a budget and a plan to get things done. Finally, remember, you are selling a used house, its not going to be in mint condition, even though the buyer may want it to be. Don't be afraid to tell the buyer "no". The last house we sold, the buyer had it inspected and asked for two minor items to be fixed, it took me about $ 10 in materials and a half hour to fix. The buyer never showed us the inspection report.
Thanks for the advice. It has been mentioned before that the seller is not obligated to see the inspection report.

gasdoc

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Re: Navigating the Appraisal and Inspection as a Seller

Post by rich126 » Wed Apr 24, 2019 1:46 pm

gasdoc wrote:
Wed Apr 24, 2019 9:22 am
Rudedog wrote:
Wed Apr 24, 2019 8:20 am
If the inspection turns up anything, lean on your realtor to help you to determine what really needs to be done, what is fair. The realtor should help you with a budget and a plan to get things done. Finally, remember, you are selling a used house, its not going to be in mint condition, even though the buyer may want it to be. Don't be afraid to tell the buyer "no". The last house we sold, the buyer had it inspected and asked for two minor items to be fixed, it took me about $ 10 in materials and a half hour to fix. The buyer never showed us the inspection report.
Thanks for the advice. It has been mentioned before that the seller is not obligated to see the inspection report.

gasdoc
I'm not sure if that is true everywhere. I do know that in many areas the seller and/or their agent are allowed to be present during the inspection.

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Re: Navigating the Appraisal and Inspection as a Seller

Post by gasdoc » Wed Apr 24, 2019 3:29 pm

rich126 wrote:
Wed Apr 24, 2019 1:46 pm
gasdoc wrote:
Wed Apr 24, 2019 9:22 am
Rudedog wrote:
Wed Apr 24, 2019 8:20 am
If the inspection turns up anything, lean on your realtor to help you to determine what really needs to be done, what is fair. The realtor should help you with a budget and a plan to get things done. Finally, remember, you are selling a used house, its not going to be in mint condition, even though the buyer may want it to be. Don't be afraid to tell the buyer "no". The last house we sold, the buyer had it inspected and asked for two minor items to be fixed, it took me about $ 10 in materials and a half hour to fix. The buyer never showed us the inspection report.
Thanks for the advice. It has been mentioned before that the seller is not obligated to see the inspection report.

gasdoc
I'm not sure if that is true everywhere. I do know that in many areas the seller and/or their agent are allowed to be present during the inspection.
Is it a choice? Is it preferred to be at the inspection in order to understand the issues, or is it better to not be present and not see the report so that you don't have to add items found to the property condition document for future buyers?

gasdoc

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Re: Navigating the Appraisal and Inspection as a Seller

Post by gasdoc » Wed Apr 24, 2019 7:02 pm

A quick update- our realtor says buyers rarely are interested in signing backup offer contracts because they don't want to feel "locked in." Instead, the realtor will call the previous offers and re-offer, and will put the house back on the market if necessary. By the way, she says she is still receiving calls from other realtors about buyers interested so not to worry. Thanks for all of the advice.

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Re: Navigating the Appraisal and Inspection as a Seller

Post by ohboy! » Wed Apr 24, 2019 8:43 pm

I wouldn’t settle for less than a closing price of the original asking price. The demand is high. The buyer should feel lucky to get the house and not demand too much in inspection repairs or credits.

It does seem like your realtor might have missed an opportunity a bit. They listed a little low. Though that can be good to attract buyers and have a bidding war.

The appraisal is kind of a crap part of the transaction. The lender appointing someone to determine the value. I recently sold a place and I sold it “as is” meaning I will not repair. It was as hot with 7 offers 10%+ over asking within 72 hours. We accepted one with no inspection contingency. However the appraiser came in low. Marked the market as “stable” instead of “hot”, hah. 7 offers in 72 hours, average market, SMH. We took the 3% appraiser reduction in sale price because it wasn’t worth arguing over. Interestingly the appraiser also pointed out an asbestos issue. Since when are appraisers asbestos experts? The buyer covered the cost of the asbestos repair to appease the loan companies requirement.

There is a lot to be said to being done with a real estate transaction. There is no easy way to sell a house, and you can’t control the outcome.

Wishing you the best, and hopeful for an easy process, let us know how it goes!

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Re: Navigating the Appraisal and Inspection as a Seller

Post by gasdoc » Thu Apr 25, 2019 6:48 am

ohboy! wrote:
Wed Apr 24, 2019 8:43 pm
I wouldn’t settle for less than a closing price of the original asking price. The demand is high. The buyer should feel lucky to get the house and not demand too much in inspection repairs or credits.

It does seem like your realtor might have missed an opportunity a bit. They listed a little low. Though that can be good to attract buyers and have a bidding war.

The appraisal is kind of a crap part of the transaction. The lender appointing someone to determine the value. I recently sold a place and I sold it “as is” meaning I will not repair. It was as hot with 7 offers 10%+ over asking within 72 hours. We accepted one with no inspection contingency. However the appraiser came in low. Marked the market as “stable” instead of “hot”, hah. 7 offers in 72 hours, average market, SMH. We took the 3% appraiser reduction in sale price because it wasn’t worth arguing over. Interestingly the appraiser also pointed out an asbestos issue. Since when are appraisers asbestos experts? The buyer covered the cost of the asbestos repair to appease the loan companies requirement.

There is a lot to be said to being done with a real estate transaction. There is no easy way to sell a house, and you can’t control the outcome.

Wishing you the best, and hopeful for an easy process, let us know how it goes!
Thank you.

gasdoc

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Re: Navigating the Appraisal and Inspection as a Seller

Post by adamthesmythe » Thu Apr 25, 2019 10:01 am

gasdoc wrote:
Wed Apr 24, 2019 3:29 pm
rich126 wrote:
Wed Apr 24, 2019 1:46 pm
gasdoc wrote:
Wed Apr 24, 2019 9:22 am
Rudedog wrote:
Wed Apr 24, 2019 8:20 am
If the inspection turns up anything, lean on your realtor to help you to determine what really needs to be done, what is fair. The realtor should help you with a budget and a plan to get things done. Finally, remember, you are selling a used house, its not going to be in mint condition, even though the buyer may want it to be. Don't be afraid to tell the buyer "no". The last house we sold, the buyer had it inspected and asked for two minor items to be fixed, it took me about $ 10 in materials and a half hour to fix. The buyer never showed us the inspection report.
Thanks for the advice. It has been mentioned before that the seller is not obligated to see the inspection report.

gasdoc
I'm not sure if that is true everywhere. I do know that in many areas the seller and/or their agent are allowed to be present during the inspection.
Is it a choice? Is it preferred to be at the inspection in order to understand the issues, or is it better to not be present and not see the report so that you don't have to add items found to the property condition document for future buyers?

gasdoc
As a buyer, I don't want either the owner or his realtor present. I would view a requirement that the owner be present as a sign of (1) a difficult seller or (2) a seller with something to hide.

I think I am indifferent about seeing the inspection report. Issues that the buyer has need to be resolved one way or the other: either by demonstrating that they are not valid (mistakes do get made) or by repair or concessions.

I suppose it is possible that a major issue turns up during inspection that is not apparent to me as a seller. It would be up to the buyer whether he wanted to reveal the issue or not after canceling the offer. I would neither try to escape knowing nor would I claim that he had an obligation to give me the report.

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Re: Navigating the Appraisal and Inspection as a Seller

Post by gasdoc » Thu Apr 25, 2019 11:10 am

adamthesmythe wrote:
Thu Apr 25, 2019 10:01 am
gasdoc wrote:
Wed Apr 24, 2019 3:29 pm
rich126 wrote:
Wed Apr 24, 2019 1:46 pm
gasdoc wrote:
Wed Apr 24, 2019 9:22 am
Rudedog wrote:
Wed Apr 24, 2019 8:20 am
If the inspection turns up anything, lean on your realtor to help you to determine what really needs to be done, what is fair. The realtor should help you with a budget and a plan to get things done. Finally, remember, you are selling a used house, its not going to be in mint condition, even though the buyer may want it to be. Don't be afraid to tell the buyer "no". The last house we sold, the buyer had it inspected and asked for two minor items to be fixed, it took me about $ 10 in materials and a half hour to fix. The buyer never showed us the inspection report.
Thanks for the advice. It has been mentioned before that the seller is not obligated to see the inspection report.

gasdoc
I'm not sure if that is true everywhere. I do know that in many areas the seller and/or their agent are allowed to be present during the inspection.
Is it a choice? Is it preferred to be at the inspection in order to understand the issues, or is it better to not be present and not see the report so that you don't have to add items found to the property condition document for future buyers?

gasdoc
As a buyer, I don't want either the owner or his realtor present. I would view a requirement that the owner be present as a sign of (1) a difficult seller or (2) a seller with something to hide.



I think I am indifferent about seeing the inspection report. Issues that the buyer has need to be resolved one way or the other: either by demonstrating that they are not valid (mistakes do get made) or by repair or concessions.

I suppose it is possible that a major issue turns up during inspection that is not apparent to me as a seller. It would be up to the buyer whether he wanted to reveal the issue or not after canceling the offer. I would neither try to escape knowing nor would I claim that he had an obligation to give me the report.
Very reasonable points. Thank you.

gasdoc

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