Selling home- Demanding Buyer (Repairs)

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Gardener
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Selling home- Demanding Buyer (Repairs)

Post by Gardener » Thu May 16, 2019 5:43 am

[Thread updated, see: this post --admin LadyGeek]

Quick background.

Home is currently under contract. Due to competing offers, price went above ask price by $25k. Under contract at $475k. Buyer came in with a strong offer- cash, no appraisal. No appraisal was very good for us because I was concerned that appraisal might not hit $475k even though that's what the market seemed to value it at.

Buyer has requested a laundry list of repairs that will total about $5,200. I accepted most of them, but in hind sight I probably should have pushed back more as many seemed a little silly to me. To be fair to buyer, they did not ask for repair of our driveway, which is aged and has cracks and sunken spots.

Now we have an inspection of our septic system and it fails, needs a new drain field and also tank evidently needs to be replaced as it is not large enough because previous home owner did not increase size of tank when they put in addition of home. Estimate for this cost is estimated to be $10k. Buyer, to be frank, has been an annoyance, asking for silly stuff here and there. He requested to be there when the county comes by and inspects the septic and drain field so that an appropriate plan for the tank and drain field could be established. I told him respectfully no, because we will already have myself, my licensed contractor, and a person from the county there. I did not want him driving up the cost, by going beyond what was necessary to pass septic inspection.

I have estimates from contractors to be ~$10,000 for repair. I need to get back to the buyer as to whether I will take care of the repair entirely on my own, not do any repair at all, or have buyer foot part of the bill. My agent told me that traditionally seller foots the bill. But, where I am, inventory is very low and demand was very high for my property, having 3 offers in 7 days. Also, Buyer (who oddly enough happens to be a neighbor only a few doors down) really, really wants the property. Is there any smart way that I can have buyer foot part of the bill? In other words, how do I get that down in writing? Buyer to pay 50% of cost for a new septic and drain field?

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djpeteski
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Re: Selling home- Demanding Buyer (Repairs)

Post by djpeteski » Thu May 16, 2019 5:51 am

Given the tight market, I would not make the repairs and give the buyer 5k off the purchase price of the home. Let them take care of the septic problem and those silly repairs what they want. Final offer. If not the house goes back on the market. Some version of that is acceptable to you and you have to weight the positive and negatives of the actual numbers involved.

You have strength in this, and the way real estate deals happen, your agent is actually a antagonist in this situation. They have worked hard and want to earn their commission and move onto the next sale. You have to consider what they say with a "grain of salt".

JoeRetire
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Re: Selling home- Demanding Buyer (Repairs)

Post by JoeRetire » Thu May 16, 2019 5:52 am

Gardener wrote:
Thu May 16, 2019 5:43 am
Now we have an inspection of our septic system and it fails,
In your locale, are you permitted to sell a home with a failed septic system? If so, I'd offer some money but let the buyer coordinate the fixes.

In my locale, you cannot sell a home with a failed septic system. You must fix it first.
I have estimates from contractors to be ~$10,000 for repair. I need to get back to the buyer as to whether I will take care of the repair entirely on my own, not do any repair at all, or have buyer foot part of the bill. My agent told me that traditionally seller foots the bill. But, where I am, inventory is very low and demand was very high for my property, having 3 offers in 7 days. Also, Buyer (who oddly enough happens to be a neighbor only a few doors down) really, really wants the property. Is there any smart way that I can have buyer foot part of the bill? In other words, how do I get that down in writing? Buyer to pay 50% of cost for a new septic and drain field?
All contingency settlements must be in writing and signed by both parties. Make an offer - whatever you think you can get away with - and see how the buyer responds. Maybe if the buyer really, really wants the property they will accept. Maybe they will counter and you will have to make a decision.

You can always offer to pay none of it. The buyer can always walk away. That's the point of contingent offers.

When we sold our house 2 months ago, there was a contingency on the house inspection. The inspector found a small list of issues (not a surprise - any good inspector can find issues). The buyers wanted some money back at closing. I offered a lot less. We settled in the middle.
Last edited by JoeRetire on Thu May 16, 2019 6:00 am, edited 1 time in total.

mgensler
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Re: Selling home- Demanding Buyer (Repairs)

Post by mgensler » Thu May 16, 2019 5:57 am

Of course your realtor said you should pay. We sold a house where the buyer found a few minor issues plus radon. We fixed the small items ourselves and told them we weren't going to do anything about the radon as all houses in the area have it. They ended up closing and paying for the radon mitigation themselves.

If this is a code violation you will probably have to disclose it if you relist.

investingdad
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Re: Selling home- Demanding Buyer (Repairs)

Post by investingdad » Thu May 16, 2019 6:00 am

If you're going to offer something for the septic, I'd offer cash. I wouldn't do the repair myself. Let the buyer take over responsibility. If it goes poorly or it needs more work, it's on them. You just pull out the appraisal and reports and advise you're not an expert and made a cash offer based on the expert's report of needed work.

That's what I would do.

Ready3Retire
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Re: Selling home- Demanding Buyer (Repairs)

Post by Ready3Retire » Thu May 16, 2019 6:04 am

Given you accepted the request to pay for the $5,200 of repairs, I suggest start pushing back a bit and agree to fund 50% of the new septic and drain field. This should make the prospective buyer feel like he got something out of the negotiation. Also, you are still getting a sell price above your initial asking price. Just my $0.02.

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SquawkIdent
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Re: Selling home- Demanding Buyer (Repairs)

Post by SquawkIdent » Thu May 16, 2019 6:13 am

djpeteski wrote:
Thu May 16, 2019 5:51 am
Given the tight market, I would not make the repairs and give the buyer 5k off the purchase price of the home. Let them take care of the septic problem and those silly repairs what they want. Final offer. If not the house goes back on the market. Some version of that is acceptable to you and you have to weight the positive and negatives of the actual numbers involved.

You have strength in this, and the way real estate deals happen, your agent is actually a antagonist in this situation. They have worked hard and want to earn their commission and move onto the next sale. You have to consider what they say with a "grain of salt".
+1

IMHO it’s time to step up a little. They set the bar with asking for everything under the sun it seems to be repaired. I would push back at least a little and see what happens. Like you said it’s a tight market and you have the edge here.

Good luck.

Jags4186
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Re: Selling home- Demanding Buyer (Repairs)

Post by Jags4186 » Thu May 16, 2019 6:22 am

I have no idea what little repairs they’ve asked for that come to $5200. Is it core systems or is it 20x versions of “this door handle doesn’t work properly”.

Regarding a septic system, I wouldn’t buy a house with a malfunctioning one and if it is malfunctioning you’ll need to disclose it moving forward if this buyer leaves. It really comes down to do you think you can net out better with a different buyer or not. You could offer a single large credit and let the buyers fix everything, which is less hassle for you.

Remember you don’t need to do anything about old and working. You should consider helping on broken. 50 year old working boiler? Buyers problem. 10 year old malfunctioning boiler? Sellers problem.

capsaicinguy
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Re: Selling home- Demanding Buyer (Repairs)

Post by capsaicinguy » Thu May 16, 2019 6:34 am

I would not underestimate the value of an over asking cash offer. Even if you paid the 10k for the septic repair you still got more than you hoped for the house. If this buyer walks you will have to disclose the septic non-compliance when you relist since now you are aware if it. Add in the potential for a failed appraisal or someone flubbing the closing if they finance and you might look back on the cost of a septic field as cheap insurance of sealing a deal. I would not get greedy right now. Just my .02.

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Re: Selling home- Demanding Buyer (Repairs)

Post by ChowYunPhat » Thu May 16, 2019 6:42 am

I read that the septic is functional but undersized for the home size based on sq ft. Curious that you were able to purchase the home with the existing risk of inspection failure...assuming you did not order such an inspection when you purchased it.

Several suggestions
1. Get other septic estimates based on the inspection. Tank expansion vs. replacement? Leech field expansion vs. replacement? etc.. I'm always skeptical, and frankly avoid, inspections provided by service companies that stand to benefit from future work resulting from their inspections. Hoping this was not the case with you.
2. Agree with other poster who suggested a cash offer. As buyer is not getting a mortgage, he/she has the option to do the repair or not and would guess this wouldn't delay a closing. Do the deal, move on with your life and from this person.
3. Wait a few days and go silent. Always a fun negotiating tactic with overly motivated, stressed out buyers. Sorry...that wasn't very nice. 8-)

Good luck Gardener. Hope the next season of life is enjoyable.
A wise man and his money are friends forever...

HomeStretch
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Re: Selling home- Demanding Buyer (Repairs)

Post by HomeStretch » Thu May 16, 2019 7:10 am

After talking to the county inspector, do you have a clear picture of the septic issue and whether a new system is absolutely required? Is your septic system functional but undersized for house square footage? Is it possible the septic system for your house is “grandfathered” meaning it’s code compliant for a house your size based on the year built but would be undersized for a new build of same square footage?

In my town, building codes have changed to require larger tanks/fields for a house my size. However, my system is functional and “grandfathered” as it met code at the time it was built. I am not required to “bring it up to code” by the town in order to sell it. But if it was not functional or not code compliant/grandfathered, the town health department would require me to make it compliant via repair or replacement before I sold it.

I would be sure I had to replace system before I offered to pay for it.

jharkin
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Re: Selling home- Demanding Buyer (Repairs)

Post by jharkin » Thu May 16, 2019 7:22 am

You mentioned septic inspection - are you in Massachusetts?

If yes, Title 5 requires that either the septic be repaired and passing inspection at time of sale, or if not, you have to escrow 150% of the estimated cost of repair at closing with a plan to get it done within some timeframe.

You can negotiate whether those funds come from you, or the buyer (in form of more cash in at closing) or a mix... but you cant avoid doing something.

Generally when it comes to inspection negotation around here, anything that is safety critical and would make the house hard to insure is up for discussion (failed roof, mold infestation, active water leaks, failing foundation, etc), but cosmetic things and wear and tear that was obvious at showing generally just piss off sellers. The buyers agent should have cautioned them to be careful about nitpicking.

researcher
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Re: Selling home- Demanding Buyer (Repairs)

Post by researcher » Thu May 16, 2019 7:46 am

Gardener wrote:
Thu May 16, 2019 5:43 am
Due to competing offers, price went above ask price by $25k. Under contract at $475k.
Buyer has requested a laundry list of repairs that will total about $5,200.
Estimate for this cost is estimated to be $10k.
But, where I am, inventory is very low and demand was very high for my property, having 3 offers in 7 days. Also, Buyer (who oddly enough happens to be a neighbor only a few doors down) really, really wants the property. Is there any smart way that I can have buyer foot part of the bill? In other words, how do I get that down in writing? Buyer to pay 50% of cost for a new septic and drain field?
You're making this way too difficult for yourself.

Given what you've described (hot seller's market, multiple offers, very interested buyer), this is what I would do...
- Provide the buyer with the written estimates for the $5200 laundry list of repairs and the $10K septic repair.
- Offer to cover all of the miscellaneous repairs + 50% of the septic repair.
- Then simply reduce the home price by $10,200 and let the buyer make the repairs.

As the seller, I wouldn't want to deal with the time/mess/headache/logistics of making all these repairs. What if the buyer has the house re-inspected and doesn't like how some of the repairs were done?

As the buyer, I would want to handle these repairs myself, to make sure they are done to my standards. The seller is motivated to do them as cheaply and quickly as possible.

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lthenderson
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Re: Selling home- Demanding Buyer (Repairs)

Post by lthenderson » Thu May 16, 2019 7:47 am

Gardener wrote:
Thu May 16, 2019 5:43 am
Is there any smart way that I can have buyer foot part of the bill? In other words, how do I get that down in writing? Buyer to pay 50% of cost for a new septic and drain field?
I suppose it depends on local regulations but I was able to purchase a house that failed septic inspection. We got three bids and settled on the middle price. The seller deducted the cost from the sale price and escrowed the money and I the buyer had to sign a form putting me on the hook for the repair and giving me six months to do so. I ended up going with a higher end system and paid the difference in cost over escrow. But the advantage is that I could make sure it was done properly and not on the cheap which is probably the concern of your buyer.

As for the $5200 in other issues, I would just say I'm selling it like it is and if the buyer doesn't like it I can go to the next bid.

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Sandtrap
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Re: Selling home- Demanding Buyer (Repairs)

Post by Sandtrap » Thu May 16, 2019 7:50 am

djpeteski wrote:
Thu May 16, 2019 5:51 am
Given the tight market, I would not make the repairs and give the buyer 5k off the purchase price of the home. Let them take care of the septic problem and those silly repairs what they want. Final offer. If not the house goes back on the market. Some version of that is acceptable to you and you have to weight the positive and negatives of the actual numbers involved.

You have strength in this, and the way real estate deals happen, your agent is actually a antagonist in this situation. They have worked hard and want to earn their commission and move onto the next sale. You have to consider what they say with a "grain of salt".
+1
I have run into this many many times, with tenants, and property buyers.
Points:
Once you go down the road of appeasement, there's no stopping.
Nit-picking is an addiction, each thing leads to another can of worms.
Establish your boundaries, hold firm.
Keep the "hassle factor" to zero. Keep your spending to what you are comfortable with.

Action: Make a middle ground counter to the buyer that you are both comfortable with. Then, get it done.
(this is a balance between "buyer in hand" and "not worth the effort".)
Last edited by Sandtrap on Thu May 16, 2019 7:53 am, edited 3 times in total.
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jminv
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Re: Selling home- Demanding Buyer (Repairs)

Post by jminv » Thu May 16, 2019 7:50 am

Buyer hasn’t asked to too much before this in relative terms since 1% of completed home value in repairs is marginal. Another 2% though is a problem if it’s for functional obsolescence reasons and not for a fail that would legally preclude a sale. Which one is it really? It sounds to me like the buyer had his inspector target your septic system and now might not trust you to fix it to his satisfaction.

Another consideration is that you have a sure thing offer here that will close quickly and has no financing/appraisal risk. It was also the highest offer. If you relist it you might end up with an offer that’s lower than the 10k + already done repairs, that won’t close quickly, and which has financing/appraisal risk. Since your septic system failed, you will have to disclose that to any new buyer. This will likely mean that you will have to remediate the septic system in order to sell the home to any buyer. I wouldn’t buy a house with a failed septic system, the county might not allow it, and I certainly wouldn’t pay to fix it myself as the buyer. That would normally be thought of as the seller’s problem. Make a deal with the buyer you already have. It sounds like you have some room to negotiate. He might have a preference for a higher end system given his wanting to be there for the county inspection so perhaps the deal will be you deducting 10k from the purchase price, closing occurring, and buyer doing repair himself with a more expensive system. I would really want the deal to close before the repair to prevent further nitpicking by this buyer.

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Sandtrap
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Re: Selling home- Demanding Buyer (Repairs)

Post by Sandtrap » Thu May 16, 2019 7:56 am

ChowYunPhat wrote:
Thu May 16, 2019 6:42 am
I read that the septic is functional but undersized for the home size based on sq ft. Curious that you were able to purchase the home with the existing risk of inspection failure...assuming you did not order such an inspection when you purchased it.

Several suggestions
1. Get other septic estimates based on the inspection. Tank expansion vs. replacement? Leech field expansion vs. replacement? etc.. I'm always skeptical, and frankly avoid, inspections provided by service companies that stand to benefit from future work resulting from their inspections. Hoping this was not the case with you.
2. Agree with other poster who suggested a cash offer. As buyer is not getting a mortgage, he/she has the option to do the repair or not and would guess this wouldn't delay a closing. Do the deal, move on with your life and from this person.
3. Wait a few days and go silent. Always a fun negotiating tactic with overly motivated, stressed out buyers. Sorry...that wasn't very nice. 8-)

Good luck Gardener. Hope the next season of life is enjoyable.
+1
Likely, if the septic system was substandard when constructed, it would not have passed inspection, or even prior bldg dept approval.
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stan1
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Re: Selling home- Demanding Buyer (Repairs)

Post by stan1 » Thu May 16, 2019 8:08 am

Emotion creeps in on real estate deals. Don't worry about a few thousand dollars. Get the deal done.

Was the addition permitted and signed off? Did the county stipulate that the septic system had to be enlarged? Septic inspections are done by septic install and maintenance companies. Of course the septic company would like someone to spend $10K on an upgrade.

The buyer is looking for ways to get some money back from you. Give them a little. Close the deal. Don't take the position that someone has to win and someone has to lose.

I was once working with a realtor I had a good relationship with and who I knew had a competitive spirit. I simply told him "do the best you can" once it became clear we were talking about less than 3% of purchase price. He took that as a personal challenge, went off and had some fun beating down the other agent, and I ended up with 90% of the disputed amount and the other party got 10%.

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Re: Selling home- Demanding Buyer (Repairs)

Post by dknightd » Thu May 16, 2019 8:34 am

I have no experience with septic systems. I'm not sure the new owner could get a certificate of occupancy without a complying septic system. One, or both of you, should figure this out.

In your shoes, I'd walk down the street. Talk to the potential buyer. Make sure they had cash on hand. Negotiate a new price based on what inspections had found. I'd probably ask them to go 50/50 on the septic improvements, since they would reap most of the benefits. I would have let them be present for all inspections, but, that is water under the bridge.

It looks like you have $15k of repairs. $5k for miscellaneous, 10K for septic. I'd verbally negotiate with buyer. See if a 50/50 split is agreeable to them. I'd start with 50/50 on everything. If they balked, then 50/50 on just the septic. Worse case drop, the price of the house by $15k. You still end up with $10k more than you expected.

Once you have a verbal agreement. Put it in writing. They agree to the reduced price, and to buy the house as is.

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Re: Selling home- Demanding Buyer (Repairs)

Post by michaeljc70 » Thu May 16, 2019 9:15 am

capsaicinguy wrote:
Thu May 16, 2019 6:34 am
I would not underestimate the value of an over asking cash offer. Even if you paid the 10k for the septic repair you still got more than you hoped for the house. If this buyer walks you will have to disclose the septic non-compliance when you relist since now you are aware if it. Add in the potential for a failed appraisal or someone flubbing the closing if they finance and you might look back on the cost of a septic field as cheap insurance of sealing a deal. I would not get greedy right now. Just my .02.
I agree. The next offer may not be as good and to think they will ask for no repairs when paying over asking is probably not realistic. You could sell the house as-is and make no repairs but that sets off red flags to buyers.

Mike Scott
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Re: Selling home- Demanding Buyer (Repairs)

Post by Mike Scott » Thu May 16, 2019 10:17 am

First you need to know what your septic code actually requires, what it will cost to fix and at which stage of the selling process it must happen. Then you negotiate on price, cash back, etc with the potential buyer. If the buyer wants more than the minimum fix, give them a chance to pay for any upgrades they might want.

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Re: Selling home- Demanding Buyer (Repairs)

Post by GT99 » Thu May 16, 2019 10:38 am

Here is what normally happens, in my experience (3 purchases, 2 sales):
1. Buyer has inspection, which gives them a list of every conceivable thing that might not be perfect with the house.
2. Buyer askes for X number of those things to be repaired, many/most of which they don't really care about because the expectation is that the seller will just offer $, sometimes providing a quote of what the repairs would cost that is extremely high.
3. Seller offers $ for the repairs rather than dealing with fixing themselves - usually less than 1/2 of total quote.
4. Buyer counters.
5. repeat until coming to agreement.


In our current house that we bought last year, a ton of stuff came back on the inspection. I would say about 1/3 of the stuff that came back was stuff we cared about at all (if not a lot). We had my contractor brother-in-law quote the work at about $21,000. Ultimately came to agreement with seller at $10,000. I'm pretty sure at this point (almost a year later) we've made 0 of the repairs.

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Re: Selling home- Demanding Buyer (Repairs)

Post by Nowizard » Thu May 16, 2019 11:28 am

This would not be an issue in our area, though the repairs could be the same. Does the purchaser not have the right to an inspection and to make repairs mandatory for a sale, at least up to a certain amount? If you have a contract, the purchaser is obligated without additional recourse, and it is your call as to how to proceed. With $15,000 in requested repairs, you have still sold above your asking price, however.

Tim

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Re: Selling home- Demanding Buyer (Repairs)

Post by megabad » Thu May 16, 2019 3:12 pm

Gardener wrote:
Thu May 16, 2019 5:43 am
Is there any smart way that I can have buyer foot part of the bill? In other words, how do I get that down in writing? Buyer to pay 50% of cost for a new septic and drain field?
I would just have the buyers credit you this at closing if needed. That said, if I was the buyer, I would not agree to pay for any of the septic system repair since this would seem like a very legitimate request/concern to me. I would likely have pushed back on the other 5200 of repairs.

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Re: Selling home- Demanding Buyer (Repairs)

Post by lthenderson » Thu May 16, 2019 3:30 pm

GT99 wrote:
Thu May 16, 2019 10:38 am
Here is what normally happens, in my experience (3 purchases, 2 sales):
1. Buyer has inspection, which gives them a list of every conceivable thing that might not be perfect with the house.
2. Buyer askes for X number of those things to be repaired, many/most of which they don't really care about because the expectation is that the seller will just offer $, sometimes providing a quote of what the repairs would cost that is extremely high.
3. Seller offers $ for the repairs rather than dealing with fixing themselves - usually less than 1/2 of total quote.
4. Buyer counters.
5. repeat until coming to agreement.
I've sold two houses and not paid a dime to either of the buyers for repairs. I just simply put "Sold As Is" clause in the purchase contract and stick to my guns. Both times after the inspection they asked for money off the agreed upon price to pay for a whole list of things brought up by the inspector but I just point out that they signed it "sold as is" and they end up paying the agreed upon price.

GT99
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Re: Selling home- Demanding Buyer (Repairs)

Post by GT99 » Thu May 16, 2019 3:57 pm

lthenderson wrote:
Thu May 16, 2019 3:30 pm

I've sold two houses and not paid a dime to either of the buyers for repairs. I just simply put "Sold As Is" clause in the purchase contract and stick to my guns. Both times after the inspection they asked for money off the agreed upon price to pay for a whole list of things brought up by the inspector but I just point out that they signed it "sold as is" and they end up paying the agreed upon price.
That's certainly an approach, but that scares some potential buyers off (some people consider it a red flag saying "there's something wrong that I don't want to fix"), and smart buyers (or those with minimally competent agents) will factor that into offers (i.e. they will be willing to pay less than they would if it's not "as is").

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Re: Selling home- Demanding Buyer (Repairs)

Post by deikel » Thu May 16, 2019 3:59 pm

You are trying to muck around 5k (do I pay half or all of the septic fix) on an almost 475k house sale *which was 25k higher than you thought possible based on listing) - that's a tad over one percent and you risk to loose a good cash offer...I am not sure I get this.

If it helps you: If you close the deal 30 days faster because of being flexible here, you can invest the money in the stock market 30 days earlier and will make 3k more money with it....(1/12 of 8% of 475ish), you close it 90 days later and the septic pays for itself....

BTW absolutely do not do the small stuff repair and only give them a price reduction for it and however you decide on the septic, I would give them the 10k and move on. They already carry the risk that the septic repair is more extensive...in my neck of the woods, the septic findings would be grounds for a penalty free redrawal of the offer, the buyer has a great chance to jump at this point and you are left with a known non compliant septic which you can only relist once its fixed (or disclose it, which will costs you prospects, because what else might be wrong if even the septic is bad)....
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Re: Selling home- Demanding Buyer (Repairs)

Post by veindoc » Thu May 16, 2019 4:12 pm

Gardener wrote:
Thu May 16, 2019 5:43 am
Quick background.

Home is currently under contract. Due to competing offers, price went above ask price by $25k. Under contract at $475k. Buyer came in with a strong offer- cash, no appraisal. No appraisal was very good for us because I was concerned that appraisal might not hit $475k even though that's what the market seemed to value it at.

Buyer has requested a laundry list of repairs that will total about $5,200. I accepted most of them, but in hind sight I probably should have pushed back more as many seemed a little silly to me. To be fair to buyer, they did not ask for repair of our driveway, which is aged and has cracks and sunken spots.

Now we have an inspection of our septic system and it fails, needs a new drain field and also tank evidently needs to be replaced as it is not large enough because previous home owner did not increase size of tank when they put in addition of home. Estimate for this cost is estimated to be $10k. Buyer, to be frank, has been an annoyance, asking for silly stuff here and there. He requested to be there when the county comes by and inspects the septic and drain field so that an appropriate plan for the tank and drain field could be established. I told him respectfully no, because we will already have myself, my licensed contractor, and a person from the county there. I did not want him driving up the cost, by going beyond what was necessary to pass septic inspection.

I have estimates from contractors to be ~$10,000 for repair. I need to get back to the buyer as to whether I will take care of the repair entirely on my own, not do any repair at all, or have buyer foot part of the bill. My agent told me that traditionally seller foots the bill. But, where I am, inventory is very low and demand was very high for my property, having 3 offers in 7 days. Also, Buyer (who oddly enough happens to be a neighbor only a few doors down) really, really wants the property. Is there any smart way that I can have buyer foot part of the bill? In other words, how do I get that down in writing? Buyer to pay 50% of cost for a new septic and drain field?
The buyer is paying a premium for this house, possibly over the appraised value. I don’t see how they are being unreasonable. They need to maximize their purchase. If they lowballed you and now were nickeling and diming you for every small issue then I could see your annoyance.

I don’t know your schedule but I would not want to oversee 15k of work in a home I plan to vacate in 30 days. Doesn’t your new home demand your attention too? The buyer seems motivated even up to the point that they want to be there to oversee inspections. This tells me this person is not afraid of a fixer upper. Some buyers want a true turn-key. Knock off 10k and let them handle the repairs.

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8foot7
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Re: Selling home- Demanding Buyer (Repairs)

Post by 8foot7 » Thu May 16, 2019 4:19 pm

+1 on the folks pointing out this is 25k over asking on a house hat needs a core waste system repair. Give the buyer the money and move on.

My answer would be different on an offer under asking.

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Re: Selling home- Demanding Buyer (Repairs)

Post by boogiehead » Thu May 16, 2019 4:37 pm

michaeljc70 wrote:
Thu May 16, 2019 9:15 am
capsaicinguy wrote:
Thu May 16, 2019 6:34 am
I would not underestimate the value of an over asking cash offer. Even if you paid the 10k for the septic repair you still got more than you hoped for the house. If this buyer walks you will have to disclose the septic non-compliance when you relist since now you are aware if it. Add in the potential for a failed appraisal or someone flubbing the closing if they finance and you might look back on the cost of a septic field as cheap insurance of sealing a deal. I would not get greedy right now. Just my .02.
I agree. The next offer may not be as good and to think they will ask for no repairs when paying over asking is probably not realistic. You could sell the house as-is and make no repairs but that sets off red flags to buyers.
+1 and how close were the other offers to this offer?

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Re: Selling home- Demanding Buyer (Repairs)

Post by Watty » Thu May 16, 2019 5:04 pm

deikel wrote:
Thu May 16, 2019 3:59 pm
You are trying to muck around 5k (do I pay half or all of the septic fix) on an almost 475k house sale *which was 25k higher than you thought possible based on listing) - that's a tad over one percent and you risk to loose a good cash offer...I am not sure I get this.
+1

Don't let your ego get in the way, it still sounds like a good deal that you would have jumped on when you were ready to list the house.

Assuming that the contract can be set up so the repairs are done after the sales closes just bite the bullet and get on with your life. If the deal falls apart then you will realistically need to get the septic system replaced before you can put the house back on the market and your landscaping will likely be pretty trashed too.

With scheduling the repairs that could mean that the house will not be back on the market until late June or July so you will have missed the prime selling season in many areas. All sorts of other thing could have happened like interest rates getting higher, the forbidden topic here of politics, you could develop health problems, the house could be hit by lightning, or your neighbor down the street could list their house for a lower price. There are also black swans and there were lots of people who were in the middle of house deals when 9/11 happened and the financial markets shut down.

That said if you want to risk letting the deal fall apart here is how I would make a counter offer. (Rework the numbers with real figures).

"It looks this type of septic system should have lasted 40 years(or whatever) and this one was 20 years old so the house was priced with an older system that should have lasted another 20 years. Since it needs to be replaced I am willing to pay half of the price to pay for the 20 years that it should have lasted."

I once had to have a roof replaced when I was buying a house. It was obviously older but just by the age it should have lasted a long time after the sale. I proposed a partial credit using a formula like that and the seller had no problems with that.

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Re: Selling home- Demanding Buyer (Repairs)

Post by rich126 » Thu May 16, 2019 6:01 pm

Are you sure this is the last possible “ask” from the buyer? If not, then whatever you agree to, I would demand the buyer sign something that they will now take the property as is in order to avoid constant “asks”. I once had an annoying buyer that I was shielded from by my agent. To pacify them he offered a small amount of money from his pocket and told me later it was the best $x he had ever spent.

From the buyer perspective he has nothing to lose in asking for stuff so theasking just continues. As a seller I am more sympathetic when things i was completely unaware of pop up. Not if hvac is old but working, minor drainage issues, etc. of course some things may be required by law.

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Re: Selling home- Demanding Buyer (Repairs)

Post by 8foot7 » Thu May 16, 2019 6:19 pm

rich126 wrote:
Thu May 16, 2019 6:01 pm
Are you sure this is the last possible “ask” from the buyer? If not, then whatever you agree to, I would demand the buyer sign something that they will now take the property as is in order to avoid constant “asks”. I once had an annoying buyer that I was shielded from by my agent. To pacify them he offered a small amount of money from his pocket and told me later it was the best $x he had ever spent.

From the buyer perspective he has nothing to lose in asking for stuff so theasking just continues. As a seller I am more sympathetic when things i was completely unaware of pop up. Not if hvac is old but working, minor drainage issues, etc. of course some things may be required by law.
This too. I forgot about this but in our last sale, my final capitulation I demanded be accompanied by “due diligence period ends upon your signature on this amendment and the offer to purchase together with this amendment becomes fully binding on both parties.”

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Re: Selling home- Demanding Buyer (Repairs)

Post by likegarden » Thu May 16, 2019 7:02 pm

$15k in requested repairs on a $475k house is really inexpensive- I would pay some of that and get the sale done.
We bought a house in 1985 north of Boston which required us to have the septic tank pumped out every half year. In case of redoing the septic system that town then would have required us to hire an engineer who would have charged $15k alone - that is 10% of the original purchase price. Miraculously the inspector of the buyer 2 years later found the septic system acceptable.

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Gardener
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Re: Selling home- Demanding Buyer (Repairs)

Post by Gardener » Fri May 17, 2019 6:05 am

Thank you folks.

Do you think adding this clause would be a sensible thing for me to do?

'Given the delays due to weather and environmental health being short staffed on inspectors, Seller agrees to credit buyer the amount of funds needed to pass inspection which will be determined by a written estimate from a licensed contractor of sellers choosing after the perc test is complete. Buyer will be supplied with a copy of the perc test and the written estimate. Should the amount of actual expense on the work be less than the estimate, the difference in estimate and actual will not be credited to buyer. Should the amount of actual expense on the work be more than the estimate, the difference in the amount will not be credited to buyer. Seller agrees to obtain a written estimate for work to pass county and septic inspection, no more, no less. Buyer will be responsible for the cost of any subsequent inspections (if buyer determines it is needed) it chooses after work is completed.'

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Re: Selling home- Demanding Buyer (Repairs)

Post by FoolMeOnce » Fri May 17, 2019 7:11 am

Good advice above. I would credit instead of doing repairs, too. And don't get too confident about three offers in seven days; that is good, but not what I would call a hot market.

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Gardener
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Re: Selling home- Demanding Buyer (Repairs)

Post by Gardener » Fri May 17, 2019 7:17 am

Appreciate it FoolMeonce

The other issue that I running in to is this:

Estimates that have been given to me run the gamut from $5-12k, but seem to be closer to the $9-$11k based off most estimates. And these are before a perc test done by the county inspector and my contractor. Theres a delay in scheduling this due to being an inspector down because of a family emergency.

So, I'm flying blind a little bit because we haven't had a perk test done yet and not been able to schedule one out.

So, I don't know how much to credit buyer for this...maybe start off at $5k? Not sure if buyer would accept an amount not knowing the full scope of the issue..

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Re: Selling home- Demanding Buyer (Repairs)

Post by stan1 » Fri May 17, 2019 7:21 am

Gardener wrote:
Fri May 17, 2019 7:17 am
Appreciate it FoolMeonce

The other issue that I running in to is this:

Estimates that have been given to me run the gamut from $5-12k, but seem to be closer to the $9-$11k based off most estimates. And these are before a perc test done by the county inspector and my contractor. Theres a delay in scheduling this due to being an inspector down because of a family emergency.

So, I'm flying blind a little bit because we haven't had a perk test done yet and not been able to schedule one out.

So, I don't know how much to credit buyer for this...maybe start off at $5k? Not sure if buyer would accept an amount not knowing the full scope of the issue..
Negotiate and don't worry about a few thousand dollars if you are not legally obligated to have this fixed to close the sale. You don't want to bring emotions into a business deal. Close the deal quickly. Has the buyer threatened to walk away?
Last edited by stan1 on Fri May 17, 2019 7:30 am, edited 1 time in total.

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Re: Selling home- Demanding Buyer (Repairs)

Post by fru-gal » Fri May 17, 2019 7:27 am

I just had a new advanced septic system put in. Simpler systems are probably less installation hassle. If the law does not require that you have it fixed before sale, I would offer the buyer cash to offset his having the work done. Let him put up with the mess. If he walks away, so be it.

When I sold my house, I used a real estate attorney, not a real estate agent. She had been an agent before she got her law license. She told me that the kind of buyer who is a pain in the neck is the kind who will come back after the sale and sue you. Walk away from that type of buyer.

For what this data point is worth, simpler systems away from the water in my area have recently cost $8k to $10k. An advanced system shoehorned into a tiny waterfront lot can get to be over $30k.

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Re: Selling home- Demanding Buyer (Repairs)

Post by Watty » Fri May 17, 2019 8:01 am

Gardener wrote:
Fri May 17, 2019 6:05 am
Thank you folks.

Do you think adding this clause would be a sensible thing for me to do?

'Given the delays due to weather and environmental health being short staffed on inspectors, Seller agrees to credit buyer the amount of funds needed to pass inspection which will be determined by a written estimate from a licensed contractor of sellers choosing after the perc test is complete. Buyer will be supplied with a copy of the perc test and the written estimate. Should the amount of actual expense on the work be less than the estimate, the difference in estimate and actual will not be credited to buyer. Should the amount of actual expense on the work be more than the estimate, the difference in the amount will not be credited to buyer. Seller agrees to obtain a written estimate for work to pass county and septic inspection, no more, no less. Buyer will be responsible for the cost of any subsequent inspections (if buyer determines it is needed) it chooses after work is completed.'
That seems too complex to me but I am not a lawyer.

I would just counter with price that is $XX,XXX lower with a stiputlation that all the inspection contingencies are waived and the septic system will be repaired after the sale by the buyer at their expense.

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Re: Selling home- Demanding Buyer (Repairs)

Post by WWJBDo » Fri May 17, 2019 8:27 am

Regarding the proposed addendum.
Your original post indicated that the buyer is nitpicking and based on your point of view, somewhat difficult to work with.
Now you are suggesting an extended business relationship lasting months while you work out payments for a septic system- in which the two of you have virtually opposite goals? I don’t know the cost to repair the system, but I do know that I would be delighted - delighted!- to give up $5 - $10k of the unexpected bonus in exchange for a deal that goes through quickly, assuming buyer will sign a document that ends further ‘asks’.

You already do not like negotiating. Don’t extend the negotiations with that language. Offer up $$ in return for an “as is” sale.
"It is difficult to get a man to understand something when his salary depends upon his not understanding it." Upton Sinclair

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8foot7
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Re: Selling home- Demanding Buyer (Repairs)

Post by 8foot7 » Fri May 17, 2019 8:33 am

Take 10k off the price of the house and be done with it

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Re: Selling home- Demanding Buyer (Repairs)

Post by staythecourse » Fri May 17, 2019 8:36 am

Easy. If you can sell the house without pitching in the cost don't. You have to be sure though. Art of negotiation is all about money and time. Those who have it have the adv. and those that don't don't.

As an aside, I sold my last house myself and the BIG take way I will be changing on my next sale (whenever that is) is to NOT take it off the market until after all the inspection stuff has been decided. It lowers the bargaining position of the buyer taking the house off the market. The buyer and their agent know it is a pain and looks bad to relist the house back on the market. For those out there keep showing the house until the inspection items are agreed. This way the pressure is on the buyer as they know others are still looking at the house.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

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Re: Selling home- Demanding Buyer (Repairs)

Post by quantAndHold » Fri May 17, 2019 8:37 am

With 3 offers in 7 days, I would never have done the first $5200 worth of work. You had all the leverage, but you wasted it by agreeing to the nitpicky repairs. But, since you’re where you are now, I would just offer to knock $10k off the price and be done with these people.

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Re: Selling home- Demanding Buyer (Repairs)

Post by SmallCityDave » Fri May 17, 2019 8:37 am

Gardener wrote:
Thu May 16, 2019 5:43 am
Quick background.

Home is currently under contract. Due to competing offers, price went above ask price by $25k. Under contract at $475k. Buyer came in with a strong offer- cash, no appraisal. No appraisal was very good for us because I was concerned that appraisal might not hit $475k even though that's what the market seemed to value it at.

Buyer has requested a laundry list of repairs that will total about $5,200. I accepted most of them, but in hind sight I probably should have pushed back more as many seemed a little silly to me. To be fair to buyer, they did not ask for repair of our driveway, which is aged and has cracks and sunken spots.

Now we have an inspection of our septic system and it fails, needs a new drain field and also tank evidently needs to be replaced as it is not large enough because previous home owner did not increase size of tank when they put in addition of home. Estimate for this cost is estimated to be $10k. Buyer, to be frank, has been an annoyance, asking for silly stuff here and there. He requested to be there when the county comes by and inspects the septic and drain field so that an appropriate plan for the tank and drain field could be established. I told him respectfully no, because we will already have myself, my licensed contractor, and a person from the county there. I did not want him driving up the cost, by going beyond what was necessary to pass septic inspection.

I have estimates from contractors to be ~$10,000 for repair. I need to get back to the buyer as to whether I will take care of the repair entirely on my own, not do any repair at all, or have buyer foot part of the bill. My agent told me that traditionally seller foots the bill. But, where I am, inventory is very low and demand was very high for my property, having 3 offers in 7 days. Also, Buyer (who oddly enough happens to be a neighbor only a few doors down) really, really wants the property. Is there any smart way that I can have buyer foot part of the bill? In other words, how do I get that down in writing? Buyer to pay 50% of cost for a new septic and drain field?

I'm in real estate and I deal with crazy all day long...

Buyer agreed to pay $25k OVER your asking price and you are complaining about $5k in repairs.... when a buyer spends a half a million on a home he will want a functional septic system.

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Re: Selling home- Demanding Buyer (Repairs)

Post by investingdad » Fri May 17, 2019 8:42 am

Watty wrote:
Fri May 17, 2019 8:01 am
Gardener wrote:
Fri May 17, 2019 6:05 am
Thank you folks.

Do you think adding this clause would be a sensible thing for me to do?

'Given the delays due to weather and environmental health being short staffed on inspectors, Seller agrees to credit buyer the amount of funds needed to pass inspection which will be determined by a written estimate from a licensed contractor of sellers choosing after the perc test is complete. Buyer will be supplied with a copy of the perc test and the written estimate. Should the amount of actual expense on the work be less than the estimate, the difference in estimate and actual will not be credited to buyer. Should the amount of actual expense on the work be more than the estimate, the difference in the amount will not be credited to buyer. Seller agrees to obtain a written estimate for work to pass county and septic inspection, no more, no less. Buyer will be responsible for the cost of any subsequent inspections (if buyer determines it is needed) it chooses after work is completed.'
That seems too complex to me but I am not a lawyer.

I would just counter with price that is $XX,XXX lower with a stiputlation that all the inspection contingencies are waived and the septic system will be repaired after the sale by the buyer at their expense.
I like the simpler statement.

I'd add the comment as well that Buyer agrees that no additional requests for repairs or credits to selling price.

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Re: Selling home- Demanding Buyer (Repairs)

Post by investingdad » Fri May 17, 2019 8:44 am

SmallCityDave wrote:
Fri May 17, 2019 8:37 am
Gardener wrote:
Thu May 16, 2019 5:43 am
Quick background.

Home is currently under contract. Due to competing offers, price went above ask price by $25k. Under contract at $475k. Buyer came in with a strong offer- cash, no appraisal. No appraisal was very good for us because I was concerned that appraisal might not hit $475k even though that's what the market seemed to value it at.

Buyer has requested a laundry list of repairs that will total about $5,200. I accepted most of them, but in hind sight I probably should have pushed back more as many seemed a little silly to me. To be fair to buyer, they did not ask for repair of our driveway, which is aged and has cracks and sunken spots.

Now we have an inspection of our septic system and it fails, needs a new drain field and also tank evidently needs to be replaced as it is not large enough because previous home owner did not increase size of tank when they put in addition of home. Estimate for this cost is estimated to be $10k. Buyer, to be frank, has been an annoyance, asking for silly stuff here and there. He requested to be there when the county comes by and inspects the septic and drain field so that an appropriate plan for the tank and drain field could be established. I told him respectfully no, because we will already have myself, my licensed contractor, and a person from the county there. I did not want him driving up the cost, by going beyond what was necessary to pass septic inspection.

I have estimates from contractors to be ~$10,000 for repair. I need to get back to the buyer as to whether I will take care of the repair entirely on my own, not do any repair at all, or have buyer foot part of the bill. My agent told me that traditionally seller foots the bill. But, where I am, inventory is very low and demand was very high for my property, having 3 offers in 7 days. Also, Buyer (who oddly enough happens to be a neighbor only a few doors down) really, really wants the property. Is there any smart way that I can have buyer foot part of the bill? In other words, how do I get that down in writing? Buyer to pay 50% of cost for a new septic and drain field?

I'm in real estate and I deal with crazy all day long...

Buyer agreed to pay $25k OVER your asking price and you are complaining about $5k in repairs.... when a buyer spends a half a million on a home he will want a functional septic system.
Perhaps the strategy was to offer over asking and then nitpick the price down.

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Re: Selling home- Demanding Buyer (Repairs)

Post by TheOscarGuy » Fri May 17, 2019 8:48 am

djpeteski wrote:
Thu May 16, 2019 5:51 am
Given the tight market, I would not make the repairs and give the buyer 5k off the purchase price of the home. Let them take care of the septic problem and those silly repairs what they want. Final offer. If not the house goes back on the market. Some version of that is acceptable to you and you have to weight the positive and negatives of the actual numbers involved.

You have strength in this, and the way real estate deals happen, your agent is actually a antagonist in this situation. They have worked hard and want to earn their commission and move onto the next sale. You have to consider what they say with a "grain of salt".
I agree with this. You have put up a lot, given how tight the market is. It sounds like they got a good deal, and they are trying to push you more. If my house had as many offers within 7 days and faced a similar buyer, I would put it back on the market.
Are there any state or town laws that you need to now declare whatever was found in the inspection -- specifically the septic system? Maybe you may use wording there to appease the future buyers.

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Re: Selling home- Demanding Buyer (Repairs)

Post by SmallCityDave » Fri May 17, 2019 8:48 am

investingdad wrote:
Fri May 17, 2019 8:44 am
SmallCityDave wrote:
Fri May 17, 2019 8:37 am
Gardener wrote:
Thu May 16, 2019 5:43 am
Quick background.

Home is currently under contract. Due to competing offers, price went above ask price by $25k. Under contract at $475k. Buyer came in with a strong offer- cash, no appraisal. No appraisal was very good for us because I was concerned that appraisal might not hit $475k even though that's what the market seemed to value it at.

Buyer has requested a laundry list of repairs that will total about $5,200. I accepted most of them, but in hind sight I probably should have pushed back more as many seemed a little silly to me. To be fair to buyer, they did not ask for repair of our driveway, which is aged and has cracks and sunken spots.

Now we have an inspection of our septic system and it fails, needs a new drain field and also tank evidently needs to be replaced as it is not large enough because previous home owner did not increase size of tank when they put in addition of home. Estimate for this cost is estimated to be $10k. Buyer, to be frank, has been an annoyance, asking for silly stuff here and there. He requested to be there when the county comes by and inspects the septic and drain field so that an appropriate plan for the tank and drain field could be established. I told him respectfully no, because we will already have myself, my licensed contractor, and a person from the county there. I did not want him driving up the cost, by going beyond what was necessary to pass septic inspection.

I have estimates from contractors to be ~$10,000 for repair. I need to get back to the buyer as to whether I will take care of the repair entirely on my own, not do any repair at all, or have buyer foot part of the bill. My agent told me that traditionally seller foots the bill. But, where I am, inventory is very low and demand was very high for my property, having 3 offers in 7 days. Also, Buyer (who oddly enough happens to be a neighbor only a few doors down) really, really wants the property. Is there any smart way that I can have buyer foot part of the bill? In other words, how do I get that down in writing? Buyer to pay 50% of cost for a new septic and drain field?

I'm in real estate and I deal with crazy all day long...

Buyer agreed to pay $25k OVER your asking price and you are complaining about $5k in repairs.... when a buyer spends a half a million on a home he will want a functional septic system.
Perhaps the strategy was to offer over asking and then nitpick the price down.
The objective was to sell the home for $450k, who cars about $5k and everyone will expect a functional septic.

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Re: Selling home- Demanding Buyer (Repairs)

Post by lkar » Fri May 17, 2019 9:00 am

If you agree to the repairs I would do them only after buyer is left with no more outs that would not require loss of significant earnest money.

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