When A Buyer Feels Remorse And Wants To Renegotiate An As-Is Contract
Buyers in the San Jose real estate market don't have it easy these days. We've been in a seller's market for quite some time now.
As a listing agent, one way Kathleen Daniels levels the playing field on San Jose homes for sale is to ensure sellers get inspections done upfront before listing their home on the MLS. In addition, sellers want to have all reports and disclosures be read, approved and sent with an offer. This way buyers make an informed decision about their offer. In other words, they have physically seen the property and carefully reviewed the disclosures and property inspection reports prior to making an offer.
Makes sense - right? Otherwise, Buyers are making what Kathleen calls a "blind offer" and the seller leaves the "as-is" clause in the purchase agreement wide open for buyers. Lets take a look at the mechanics of how this works via the contract.
Paragraph 9 of the California Residential Purchase Agreement states:
"9. CONDITION OF PROPERTY: Unless otherwise agreed: (i) the Property is sold (a) in its PRESENT physical (“as-is’) condition as of the date of Acceptance and (b) subject to Buyer’s Investigation rights; …"
The term “as is”, as defined by many years of legal update training, means “as known, as disclosed” at the time the offer is made.
Subject to Buyer's Investigation rights means that the buyer may get their own inspections. Kathleen recommends Buyers always get their own inspections. IF the buyers inspections reveal anything new, that was not previously disclosed and/or outlined in the sellers inspection reports, then a buyer is well within their rights to ask the seller for repairs ,or credits, for those newly revealed conditions.
HOWEVER, if the buyers inspection report does not reveal any new, unknown, or undisclosed conditions, then the offer to purchase in its "as-is" condition stands.
If the sellers property inspection report reveals, for example, that the furnace and water heater are aged and at the end of life, and the buyer read that inspection report prior to making an offer, then the buyer knew the furnace and water heater were aged and likely in need of replacement in the near future, prior to making an offer.
If the buyers property inspection report reveals the same conditions regarding the furnace and water heater, then those conditions are not new. They were known, and disclosed. Therefore, if the buyer submits a request for repairs to the seller asking the seller to replace the furnace and water heater, that is nothing more, or nothing less than, an attempt to renegotiate the terms of the initial offer. This could be a sign of buyers remorse.
If that happens, either the buyers agent failed to educate their client on what "as-is" means; the agent does not know what "as-is" means; or the buyer is simply feeling remorse, like they paid too much for the property, and want a better deal.
I it common in today's real estate market for Buyers to compete in multiple offer situations. They make an offer for more than list price. The offer is subject to appraisal. Maybe they hope the property won't appraise and the seller will lower the price to meet the appraised value. If the property does appraise, the buyer is on the hook for their offer, subject to, of course, all other contract contingencies.
Buyers and their agents are on a slippery slope when they write an offer for more than asking price, hoping the offer is the highest offer and accepted by the seller, and then attempt to renegotiate the contract by asking for repairs for items that were known and disclosed.
It is all about intention and understanding the process. Ignorance is no excuse. An offer made and accepted is based upon the written contract. If the intention was to get a credit or have the seller replace certain items, then the initial offer needs to state that. The back door approach to buying a home rarely, if ever, works in the San Jose real estate market. Most particularly, not when there are other buyers waiting in the wings in a sellers market.
There is only so much Kathleen can do as a listing agent. Preparing the home, completing inspections, making all reports and disclosures available for buyers and their agents to review prior to writing an offer, vetting a buyer's financial, etc. The things we can never be truly certain of is a buyers intentions or if the buyers agent has adequately explained the purchase agreement and ensured their clients understand what they are signing and how the purchase process works, as per the contract.
There will be times when a buyer will attempt to leverage their own inspection report and attempt to renegotiate their contract with the seller. No one can prevent a buyer from doing that. The seller has no contractual obligation to meet any buyer request for repairs other than those that are already part of the contract and/or required by State laws and local ordinances.
It's important that all parties understand the contracts they sign. Without a general understanding of the mechanics of the contract, buyers and sellers may feel remorse after they have signed and created a legally binding contract.
If you need to sell your San Jose home, you definitely want to hire an agent who understands the contract and who has your back. Kathleen Daniels will share her listing marketing strategy which is proven to net sellers more money. In addition, when you list your home with Kathleen, the property is protected with a home warranty and a Seller's Protection Plan. Call Kathleen for details. 1-408-972-1822
When A Buyer Feels Remorse And Wants To Renegotiate An As-Is Contract - by Kathleen Daniels - San Jose Homes for Sale
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