Special offer

The Offer, the Inspection and the Money

By
Real Estate Agent with RE/MAX United Real Estate

In a recent post about Counting Chickens Before They're Hatched, I mentioned that I feeling pretty good about things until the inspection came along and had a lot of stuff on there that the Seller really hadn't expected.

Of course, the Seller had all their money tied up in the house and, to make matters even more interesting, the Sellers had moved out of the area and weren't planing on coming back.  So here we were with lots of little and not-so-little repair items, a Seller with no money (yet) and me facing the possibility of coordinating multiple  contractors to do various things around the house.  Not pretty.

Even if the Seller had money, they had already given up the max the lender would allow in closing help at the time of the offer.  You see, the buyer wanted every last nickel out of the deal and really didn't have a lot of cash to complete the purchase anyway.  So they put all the closing help they could get in the offer and the Seller, wanting to sell the house, agreed.

Now, with the inspection completed there was no more money to give and the Seller (or me, for that matter) didn't want to mess around calling various contractors to fix what the buyer wanted fixed.

We came up with two solutions: release the contract and give the buyer they're earnest money back or negotiate a lower sales price and proportionately lower closing costs credit and sell the house in "as is" condition -- no repairs.

I guess the buyer really wanted the house, after all.  They agreed to accept the lower sales price and the house in "as is" condition with no repairs.

To my way of thinking this was a kind of win-win solution.  The buyer gets a less expensive house with a smaller mortgage payment and, even though there were repair issues, the buyer evidently can deal with it.  The seller gets to sell their house with out the headache of repairs.  The Realtor makes out because he doesn't have to coordinate all the repairs....and might even get paid sooner rather than later.

Of course, the fat lady hasn't sung yet.  We haven't gone to settlement and since the Sellers are out of town they have to get documents signed and notarized and back to the title company up here for everything to get done.

We are getting closer, though. 

I guess what I've learned from this is that it isn't always the best thing to wring every last penny from the Seller right at the time of the offer.  Maybe leaving some to take care of inspection issues might work. I'm sure not every Seller could or would lower their selling price.

Comments (9)

Kelly Willey
Long and Foster BEL AIR MARYLAND - Bel Air, MD
Short Sale Agent - Harford County Maryland Real Estate

Never before have I worked so hard for so little. And I have been doing this for 20 years

Aug 25, 2008 01:25 PM
Teri Deane
RE/MAX 100 - Columbia, MD
Realtor, ABR, CRS, SFR - The Deane Team

Sounds like you found the best solution, Ken.  I'm a believer in win-win situations.  One thought, if the seller had an AHS (or other) home warranty, that would have covered the repairs minus the deductible (if they had both seller & buyer coverage).

Aug 25, 2008 01:38 PM
Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

Hopefully the end is in sight.  It sounds as if you negotiated a win/win which is what this business should be about!

Aug 25, 2008 01:58 PM
Martha Brown
Long & Foster Real Estate, Inc., Annapolis MD 21403 - Annapolis, MD
Your Homes Around Annapolis Agent

Ken- Good going on thinking beyond the problem to a great solution.

Aug 25, 2008 02:01 PM
Ken Montville
RE/MAX United Real Estate - College Park, MD
The MD Suburbs of DC

Kelly -- Amen!

Teri -- The Seller will provide a warranty but sometimes those guys like to see the inspection report before they cover whatever the buyer/new owner wants fixed... and then sometimes don't honor the claim since it was on the inspection report.  Warranty companies are a whole other bag o' worms.

Cindy and Martha  -- Thanks!!

Aug 25, 2008 10:44 PM
Teri Deane
RE/MAX 100 - Columbia, MD
Realtor, ABR, CRS, SFR - The Deane Team

That's a new one on me, Ken.  I've never had the warranty people ask for the inspection report or refuse a repair because it came up during inspection.  The sellers just call in the repair -- no problems as long as it's a covered item.  But then, I have always used AHS -- perhaps some of the other ones are different.

Aug 25, 2008 11:05 PM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Another lesson here is that a home owner will either maintain their property or pay for deferred maintenance at the point of sale through a lower sales price. 

Buyers also learn that a resale home is not in new home condition and they can benefit from sweat equity. 

Of course, if the new owners don't make the repairs, the property will just continue to deteriorate. 

It saddens me to see homes neglected.  Folks worry about cosmetics and let the systems to go pot.

Oh well.

Aug 25, 2008 11:49 PM
Patricia Kennedy
RLAH@Properties - Washington, DC
Home in the Capital

Ken, you're a pro.  You'll make it work!  Sounds like you found a great solution to a sticky wicket!

Aug 26, 2008 12:21 PM
James Downing - Metro DC Houses Team REALTORS®, CRS, GRI, ABR,MRP, MilRes
Real Living | At Home - Washington, DC
When Looking to Buy or Sell - Make the Right Move

Great solution Ken.  Although, like Lenn said - it's too bad folks defer all their maintenance until its too late!

Aug 28, 2008 02:22 PM