Total CostThe Cost Of Things Not Offered For Sale With The Home!

When we get an offer on one of our homes for sale we check for what the buyers ask for above and beyond what the seller offered in MLS.  It may be a refrigerator, a home warranty, title insurance, thousands of dollars in closing costs or that $10,000 zero radius turn mower.

Our advice to the sellers is typically:  Reject what you can't live with (especially personal property requests) and move up your acceptable net price to cover the items you're willing to concede.  That home warranty that costs $500 to the seller at closing just moved up the minimum acceptable purchase price that same $500.  And the $1000 title insurance request just did the same along with the 3% closing costs assistance.

Now the drawback to this can be twofold:  1) the buyer may not be willing to come up to the "new" minimum or 2) the total purchase point can go past the appraisal amount. 

And for the buyer, what's the actual cost of those requests?  Depending on their mentality and that of the sellers, it may mean the loss of the home.  Demanding a personal possession be included can be a deal breaker.  It might seem like a minor possession, but it's sometimes a power struggle and that deck furniture is about more than deck furniture.  And depending on the listing agent's ability to persuade the seller, the closing cost assistance might be met with "Well I DIDN'T need closing cost assistance when I bought my home so WHY should I give it to them??".

And then there's the actual financial cost of the requests.  Take that $500 home warranty that's good for one year.  Let's assume a 30 year loan fixed at 3%.  Take that $500 out to the full 30 years and you paid $758.89 total and $2.11 a month extra for 29 years for something no longer returning value to you after the first year.  Now we're not financial advisers, but it would seem that rather than financing the home warranty, you're probably better off paying out of pocket.  Admittedly $2.11 a month is probably not a big deal, but expand that concept for each of the extra items the buyer asked the seller to pay for and the increased cost of the monthly payment may be significant.

So when as a buyer you're writing that offer stop and ask:  "Do we REALLY need this item added to the cost of the home?".  Ask for whatever you want, just be aware of the possible consequences.

Serving Warren County's residential real estate needs,
Liz and Bill aka BLiz

REALTORS(S) Serving Warren County Ohio & Adjacent Areas

The Liz Spear Team of RE/MAX Elite
Elizabeth & William Spear
Ask for us by name if you visit the office!
EHO Two locations: Lebanon & Mason, OH
Liz direct:  513-265-3004
Bill direct: 513-520-5305     
Fax: 866-302-8418
MailTo:  LizSpear@Go-Concepts.com
Our Website:  www.LizTour.com

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70 Comments on The Cost Of Things Not Offered For Sale With The Home!

20 Most Recent Comments Displayed Show All

FEB
19
1,049,935 Points 284 Featured Posts Outside Blog Called Shot Master

Gene, Thanks!  I'm still old school enough to think we're responsible for our own actions and choices.  Pushing a seller too hard can lead to a complete implosion of a deal, even to the point of the buyer getting blacklisted EVEN if they're offering the best terms.  Now it's easy to argue the seller shouldn't let their emotion kick in, but human nature isn't always so easily controlled.  For the buyer and seller (and agents) it's critical to pick the right battles and let the trivial stuff stay up where it belongs, off the table and not causing trouble.

Brenda, It's the low offer combined with another reduction for closing costs that can scuttle any hope of bringing it together.  The gap is wider than the numbers show once you get to the net of the offer.  I'd argue that whether the seller expects to pay the h.w. or not, it does have an impact on the final price.  They set a minimum threshold to reach based on the expectation of what they have to pay.  Remove it and they SHOULD have the capability to sell $500 cheaper, although I'm sure they'd rather put that $500 into their pocket as a few months of pizza money :)
9:40am • #51
878,193 Points 223 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

The converse applies as well.  I often tell sellers "Do you want to buy your house back for the price of a home warranty?"  Cause effectively, that's what they're doing.  They have a sale in hand, and for the cost of about $500.00 are you willing to buy it back, and become the owner again?
1:52pm • #52
1,049,935 Points 284 Featured Posts Outside Blog Called Shot Master

Alan, You'd hope between the seller getting your message and the buyers getting our message at least ONE of them would come to their senses and keep the deal on track :)
3:32pm • #53
118,017 Points Outside Blog Hit Router

Hard to put a value on "stuff" included in the sale. Appraisers hate it.
3:40pm • #54
935,901 Points 51 Featured Posts Called Shot Master

I think the comments about builder upgrades are right on!  I remember one particular home which had an original price of $190,000, but had an additional $24,000 in upgrades.  Had it been a longterm occupancy and ownership, it may have penciled out.  But it was less than 2 years.
5:04pm • #55
1 Featured Post

So frustrating. I just had a buyer request a fridge that was not in the MLS listing. Buyer refuses to pay for it, seller refuses to let it go. UGH. Lose a deal over a used fridge? 
6:26pm • #56
584,667 Points 105 Featured Posts Outside Blog Called Shot Master

Some people just have to ask for all they can get... and sometimes it means they get nothing.
6:27pm • #57
1,049,935 Points 284 Featured Posts Outside Blog Called Shot Master

Liane, I don't blame them.  I'd be tempted to value all the extra stuff at $0 and just be done with it.

Myrl, Buying new construction without a long time frame is almost financial suicide unless you've got a strongly appreciating market, and who can guarantee that?

S.A.S., Crazy isn't it?  What's the going rate for a used frig on Craigslist?  I'm betting not worth the cost of a house!

Marte, And nothing is what they deserve if they can't be rational.
6:54pm • #58
985,940 Points 49 Featured Posts Outside Blog Called Shot Master

Bill & Liz - Great way to break it down for a home buyer.
6:58pm • #59
1,049,935 Points 284 Featured Posts Outside Blog Called Shot Master

Michelle, Thanks!
7:55pm • #60
876,517 Points 10 Featured Posts Attended Rain Camp Called Shot Master

Liz, Bill - I always check with lender what could be the max 'credit at closing to buyer', making sure offer does not have money lost on table....
11:48pm • #61
FEB
20
1,049,935 Points 284 Featured Posts Outside Blog Called Shot Master

Praful, That's good to know.  No point in getting concessions and then not being able to use them due to loan rules.
3:33am • #62
Outside Blog Attended Rain Camp Called Shot Master

Very good post.  People just don't think.

Greetings from Innerloop Houston Texas

Linda Jamail Marshall
7:48am • #63
1,049,935 Points 284 Featured Posts Outside Blog Called Shot Master

Linda, Thinking about it rationally can totally change the path of the negotiations.
7:52am • #64
Outside Blog

Good post.  I;ve seen what you described about wanting a particular piece of personal property.  It often turns into a war of wills.  I tell my sellers to remove anything that they are not willing to part with.  It's worked pretty well. 
8:50am • #65
1,049,935 Points 284 Featured Posts Outside Blog Called Shot Master

Tom, Those war of wills are no fun at all.  Just a battle about being top dog and not about the property at that point.
8:52am • #66
FEB
21
543,130 Points 119 Featured Posts Called Shot Master
Bill and Liz. Some Buyers want the Seller to "toss in" some goodies to make the deal. It doesn't hurt to ask but really a riding lawn mower is not a freebie. You can replace that with lawn mower with just about any pricey item and I have seen some weird requests.
8:16am • #67
1,049,935 Points 284 Featured Posts Outside Blog Called Shot Master

Valerie, We had someone once ask our seller for a $15k value riding lawn mower.  It was a deal killer.
8:21am • #68
136,978 Points 1 Featured Post Outside Blog Attended Rain Camp

I had a seller offer a very nice riding lawn mower free with the purchase of his house.  He was moving to an apartment, and did not need it.  But the gimme, gimme, gimme buyers are a real turn off.
6:35pm • #69
FEB
22
1,049,935 Points 284 Featured Posts Outside Blog Called Shot Master

Karen, In that case makes perfect sense, especially if he didn't want the hassle of trying to find someone else to buy the mower.  So often it's just the attitude about how it's done, and a gimme, gimme, gimme perception doesn't sit well at all.
3:31am • #70

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Liz and Bill Spear RE/MAX Elite Warren County Ohio: Cincinnati to Dayton

Liz and Bill Spear

Mason, OH

More about me…

513.265.3004 www.LizTour.com

Address: 5720 Gateway Blvd, Suite 203, Mason, OH, 45040

Cell Phone: (513) 265-3004

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REALTORS(R) serving Warren County Ohio and surrounding areas. Observing and reporting on real estate and related topics to help your quality of life! And if you're asking where is Warren County Ohio? We fill the space between Cincinnati and Dayton. Perfect for enjoying the bigger cities without living in them. Places like Mason, Lebanon, Springboro, Waynesville, Franklin and more. Plus lots of rural properties available too. We work with both residential homes buyers and sellers.


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