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Hoping for some help here. My wife and I are trying to buy a house. Here's the situation:
Our initial offer was as a warranted sale (about a month ago), and asked the buyer to replace the roof at a particular price (less than they were asking).
Our Realtor initially told us that the sellers had accepted the price and agreed to put the roof on the house, but wanted to go As-Is on anything else that cropped up. He did not have the contract itself in hand when he told us this - just the list of changes to the contract. The seller, a day or two later, sent the full contract with the roof part crossed out. Turns out they wanted to do a straight up as-is sale.
So, we terminated that one and sent a new as-is offer at a lower price yet. Contract accepted and, and we have a 15 day inspection period.
We have completed our inspections and gotten estimates for the many repairs. When we sent the offer, we had expected $5,000 for the roof, based on the estimate the seller provided (it is a small house), and maybe another $5,000 for additional repairs. We are looking at more like $20K as there are several other items. The roof is still the largest individual item, but there is a fair amount of wood rot to repair, there are 4 large trees on the lot that we've been advised to remove in addition to a number of small ones, and so on.
So I know we can walk away, but we'd prefer to negotiate a lower price given the much higher than expected repair costs. We've sent an addendum to the seller asking for another price reduction to off-set the additional repairs. My Realtor says that the seller has 5 days to respond - which would be beyond the end of our inspection period.
I'm reading the contract and the part about the addendum time-period is clearly under the warranted sale section, and not under the As-Is portion. So my question is, if we wait five days and they reject the addendum, are we stuck with the original arrangement? What do we do here?
Inspection reports that include things like "trees should be removed" may strike some buyers as helpful but of the many times I have encounter such things the sellers and even experiencced buyers just roll their eyes. Yes, I agree that there can be issues with trees so closs to the home that they threaten the foundation or rub against the roof but anybody that is not "sight impaired" can figure those things out on their own and very likely had valid reasons for not doing them like aesthetic concerns...
The situation here is even clearer -- after the initial rejected offer it seems likely to be futile to ask for things that would not be absolutely necessary to get financing -- I mean yes I know inspection reports often contain pages of "minor items" that probably in a perfect world are a good idea to address but if the seller already said "no dice" to a modest roof repair what makes you think they'll ok FAR MORE CONCESSIONS for things that are kind of nit picky like GFCI, appliance connections, wobbly hand rails and other things that are certainly NOT going to prevent a lender from making a loan...
To be sure, an inspector that does a thorough job will generally find a whole lot of things that an informed home buyer should factor into their decision to purchase or not but a sane seller that is already doing down an "as is" path probably is not going to be the right person to ask to pay / reduce selling price...
Thanks everyone - we were not asking for repairs to be done. We were asking for a price reduction so we could handle the repairs ourselves.
And on the trees - I did have the county resource confirm that the trees needed to come down. I thought this was prudent because the others that looked at the trees make their living by cutting trees down. He was less dramatic about it than the tree companies, but generally agreed that the trees in question needed to go at some point in the next few months.
Regardless, the seller got back to us shortly after I posted earlier. They are completely unwilling to move any further. As I don't have the cash on hand to handle the extent of repairs that will be required, our decision is made for us.
I guess if the house is still available in a few months, and we decided we can afford it, we can always offer again, knowing better where the line in the sand is. Many lessons learned here.
I know it doesn't matter at this point but, if I read your first post correctly, I think your understanding of the situation was wrong. Read your contract again so you know how it works for your next time. The odds are that you had 15 calendar days to do your inspections AND give written notice of your intention to back out if the situation warranted. Once you pass that date without giving that written notice, you probably have lost your right to back out based on inspections. If you give the other party x number of days to sign something and that carries you past your inspection deadline, you have essentially missed your deadline which means that you have given up your right to back out. Read your contract and see if that is correct and, if this should come up again on your next deal and your interpretation of your contract differs with what your agent is telling you, by all means check with a real estate attorney.
I know it doesn't matter at this point but, if I read your first post correctly, I think your understanding of the situation was wrong. Read your contract again so you know how it works for your next time. The odds are that you had 15 calendar days to do your inspections AND give written notice of your intention to back out if the situation warranted. Once you pass that date without giving that written notice, you probably have lost your right to back out based on inspections. If you give the other party x number of days to sign something and that carries you past your inspection deadline, you have essentially missed your deadline which means that you have given up your right to back out. Read your contract and see if that is correct and, if this should come up again on your next deal and your interpretation of your contract differs with what your agent is telling you, by all means check with a real estate attorney.
This - I think the correct way to do what we wanted here was to terminate the contract before the inspection period was up, and send an offer with revised terms in. Which is what wound up happening (at least the termination part).
Sounds like we got out of this one OK and will be much better prepared in the (hopefully near) future.
Well, either that or send them the addendum with the request for a credit that must be signed no later than, say, the day prior to the last day of your inspection deadline. That gives you time to exercise your right to back out.
Note: remember, using an addendum to try to get a concession is preferential (IMO) compared to just cancelling and sending another offer. You never know if there might be another buyer ready to step in and, as a negotiating tactic, it is never a good idea to paint yourself into a corner like that with no way out. If you are willing to back away/lose it, that is one thing but if you are just hoping to get something out of them, it is way too great a risk.
Inspection reports that include things like "trees should be removed" may strike some buyers as helpful but of the many times I have encounter such things the sellers and even experiencced buyers just roll their eyes. Yes, I agree that there can be issues with trees so closs to the home that they threaten the foundation or rub against the roof but anybody that is not "sight impaired" can figure those things out on their own and very likely had valid reasons for not doing them like aesthetic concerns...
The situation here is even clearer -- after the initial rejected offer it seems likely to be futile to ask for things that would not be absolutely necessary to get financing -- I mean yes I know inspection reports often contain pages of "minor items" that probably in a perfect world are a good idea to address but if the seller already said "no dice" to a modest roof repair what makes you think they'll ok FAR MORE CONCESSIONS for things that are kind of nit picky like GFCI, appliance connections, wobbly hand rails and other things that are certainly NOT going to prevent a lender from making a loan...
To be sure, an inspector that does a thorough job will generally find a whole lot of things that an informed home buyer should factor into their decision to purchase or not but a sane seller that is already doing down an "as is" path probably is not going to be the right person to ask to pay / reduce selling price...
I agree with Chet on this one.
I have no idea what is on your inspection report, or the real condition of the house, but home inspectors tend to be very thorough and list plenty of "nice to have" little things along with some glaringly obvious things too (like the trees)
if I were a seller, short of a tree leaning on the house, I wouldn't be negotiating that as an inspection issue. If the tree was leaning on the house, I wouldn't either, you should have been able to see that when you put your offer in.
To me, it seems that either A) the house is a disaster of somewhat hidden items that really needed an inspection to tell you that... or B) you're really making a cash grab at the seller.
If I just negotiated to give you a large credit to give yourself a new roof then you're coming back to me with thousands of $$ in other concessions that you want I'd tell you to move on.
I do appreciate all of the feedback. What all this boils down to is that we disagree with the seller as to the value of this house. Being about 10K apart on a 120-140K house is pretty far apart, I think. If they find another buyer who is closer to their number, more power to em. If not and we're still looking in a few months, and that house is available (I think it will be), who knows what might happen.
I know it is hard to really say what the market value is on a particular house, but when a house down the same street that is 400 square feet (30%) bigger, has a 2 car vs 1 car garage, and is on a better maintained lot and in better condition (already has the new roof) is listed at a lower price, it makes me think perhaps we chose the house with owners that didn't really want to sell.
Too bad we decided that one was too big for us - we chose the smaller one deliberately, knowing that we would not be paying the asking price. We did not see the extent of the wood rot, the state of the trees, or the wood-decay fungus in the crawl space or our initial offer would have been lower in the first place and rejected outright and we would not have wasted so much time on this house.
Lesson learned on this - if the deal becomes "As-Is", assume the repairs are going to be at least double what my eye tells me and proceed from there.
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