FAQ #2 - The Inspection: What Can I Ask The Seller To Fix?

By
Real Estate Broker/Owner with New Paradigm Partners LLC EB #1326335
https://activerain.com/droplet/Sxj

InspectionThe inspection is done, we've read through the report, and now we have to talk about our inspection objection. As we do that, here's a couple of things to keep in mind:

The inspection clause of the contract is heavily weighted in favor of you, the buyer. If the property isn't satisfactory, in your subjective discretion, you may request the seller to correct any deficiencies, or alternatively, you have the option to cancel the contract.

If you choose to cancel, there is a simple form to fill out, and that's it. No reason or explanation is necessary.

If you choose to request repairs or adjustments, the seller may agree or not. If we can't reach an agreement with the seller by your resolution deadline, the contract will automatically terminate. So, essentially, we're going to be negotiating again with the seller (and I'll bet you thought we were done with that).

As we do that, we'll want to try to categorize the problems into major and minor issues, and you and the seller may not agree with how the issues fall into those categories. But let's start with the big ones - health & safety issues, structural issues, mechanical issues, etc. These can be considered material defects in the property, and if we request that they be repaired, and the seller refuses, he will be obligated to disclose their existence to any future buyers if your contract should fall. So we have an advantage in asking for these to be repaired. But if they are pricey, be prepared for the seller to try to negotiate some participation from you. In some cases, that may make sense - in others, not so much. We'll ask and see what happens.

The next category of things will be stuff that is broken or damaged, but doesn't really constitute a defect. Maybe we're talking about a minor plumbing leak, or a missing fixture, or a non-functioning feature. This is going to be a gray area, and the seller's response will be based in part on what else you're asking for. So let's keep these in that same perspective - it's the big things we should really be concerned about first.

Finally, there may be some condition items - worn carpeting, discolored paint, scratches, etc. The general practice regarding this stuff is that they really aren't inspection issues, and that since they were, usually, in evidence when you made the offer, your offer should have accounted for them. Don't expect a lot of positive response on these issues.

Objection NoticeAs we make our list of what to ask for, let's try to get inside the seller's head a bit. Whatever we ask for, the seller is going to think about what you're paying for the property. If we really beat him up on the price negotiation, he's going to be a lot less enthusiastic about doing the requested work than if you made a full-price, or close to it, offer.

Okay, now let's get to that list. The answer to your original question - What can I ask the seller to fix - is literally, anything at all. But practically, let's talk about what is really important to you. Obviously, you're going to want the major issues addressed, and if there are only one or two, we can throw some other stuff - maybe the ones that would be the most hassle for you to take care of. But let's leave out the little things that a trip to Home Depot and 15 minutes with a wrench and a screwdriver would cover.

Once we have our list, let's do a little research. If we spend time getting some preliminary estimates on prices for these items, we'll have a much better idea how the seller may react, and we may decide to modify the list. We'll also want to think about how we structure the request - will we need to require that the work be done by licensed contractors? Are there specific contractors we want to do the work? Specific materials or products? If there are upgrades from standard quality, will you be willing to cover the difference in cost? (Hint: the answer to that last one is "yes".)

I think we're ready now. Let's write up your objection notice, get it to the listing agent, and see how it goes. And don't worry - everyone involved wants to see this settled. Let's keep that in mind as we work through it.

Posted by
Mary & Dick

Mary & Dick Greenberg
New Paradigm Partners LLC
2601 S. Lemay Ave. #41
Fort Collins, CO 80525
970-689-4663
www.maryanddick.com

 

Data Source: IRES MLS

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Re-Blogged 9 times:

Re-Blogged By Re-Blogged At
  1. Julie Brown 03/22/2013 02:35 AM
  2. MaryKay Shumway 03/22/2013 03:03 AM
  3. Beth Atalay 03/22/2013 03:04 AM
  4. Debbie Reynolds 03/22/2013 09:12 AM
  5. Esko Kiuru 03/22/2013 12:13 PM
  6. John G. Johnston 03/23/2013 12:13 AM
  7. Georgie Hunter R(S) 58089 03/23/2013 02:27 PM
  8. Robert L. Brown 05/16/2013 04:51 AM
  9. Will Nesbitt 05/16/2013 05:09 AM
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Rainer
140,201
Tony Hager
United Realty Texas - Denton, TX
Broker

Very well written post but thought I would point out that the 4th paragraph is not accurate in Texas.

I'm not familiar with CO law but according to our Association in Texas a Proposed Amendment that is not accepted does not automatically void the original contract. They state a Buyer or Seller can propose an Amendment at any time but if not accepted does not have any bearing on the original contract that is in place.

Mar 23, 2013 04:16 AM #54
Rainmaker
1,066,187
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

It is so important to understand what the Seller's circumstances are and try to get into the Seller's head.  This paragraph is worth its weight in gold!    "As we make our list of what to ask for, let's try to get inside the seller's head a bit. Whatever we ask for, the seller is going to think about what you're paying for the property. If we really beat him up on the price negotiation, he's going to be a lot less enthusiastic about doing the requested work than if you made a full-price, or close to it, offer."

Mar 23, 2013 04:54 AM #55
Rainer
161,490
Teri Clardy
Colorado Premier Staging, LLC - Littleton, CO
APSD Certified Home Stager Pro

Great blog post and something that would be a good thing to provide to every buyer.  

Mar 23, 2013 06:14 AM #56
Rainmaker
1,544,158
Georgie Hunter R(S) 58089
Hawai'i Life Real Estate Brokers - Haiku, HI
Maui Real Estate sales and lifestyle info
Very well done! You have explained things in a very plain and understandable way. This Is worth repeating.
Mar 23, 2013 06:20 AM #57
Rainmaker
1,334,935
Nick T Pappas
Assoc. Broker/Broker ABR, CRS, SFR, e-Pro, @Homes Realty Group, @HomesBirmingham & Providence Property Mgmnt, LLC Hun... - Huntsville, AL
Madison & Huntsville Alabama Real Estate Resource

Dick, great explanation of the inspection process in Fort Collins Colorado.  It's always interesting to hear about other areas and how their real estate process works.  Here in Huntsville Alabama, the sellers are not required to repair anything that is considered cosmetic...only structural or health, safety or hazardous conditions apply and if the seller elects not to repair then the buyer may be released from the contract.

Mar 23, 2013 07:43 AM #58
Rainmaker
138,924
Annett T. Block
NextHome Connect Realty - Fort Lauderdale, FL
Your NextHome in Fort Lauderdale Beach

Great post Dick. I thing we as agent's should guide a buyer or seller in the transaction. To many times unreasonable request on each side can shake a contract. I believe it is our duty to guide our costumer or clients in the direction that everybody is happy, even if it means to cancel a contract.

Mar 23, 2013 10:45 AM #59
Rainer
226,519
Rafi Footerman
Mid Jersey Inspections - Edison, NJ
Home Inspector, Mold Inspector, Radon and More!

Wow, that's not the case in NJ.  The seller almost always has the right to remedy and the buyer can't cancel if they do.

Mar 23, 2013 11:17 AM #60
Rainmaker
370,688
Travis "the SOLD man" Parker; Associate Broker
iXL Real Estate-Wiregrasss\ - Enterprise, AL
email: Travis@theSOLDman.me / cell: 334-494-7846

WOW - GREAT way to break it down so that it makes sense to a Buyer with several "items" on the Inspection. THANKS!!

Mar 23, 2013 11:33 AM #61
Rainmaker
1,544,158
Georgie Hunter R(S) 58089
Hawai'i Life Real Estate Brokers - Haiku, HI
Maui Real Estate sales and lifestyle info

Thanks for allowing us to reblog this one... and I see I'm not the first one to do so!

Mar 23, 2013 02:25 PM #62
Ambassador
4,304,722
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Dick, times change and so is our explanation to the buyers. In buyer's market, we could 'educate' buyers on asking for everything and in seller's market....hmmmmmm.

Very detailed post and very educative (I'd give 10/10 for this post on conversation with the buyer after home inspection - though I explain them at my first meeting, I can go more in depth as you have done!)

Mar 23, 2013 02:33 PM #63
Rainmaker
500,719
Paula Hathaway, REALTOR, LBA
Douglas Elliman Real Estate - Southampton, NY
...A Local Expert in all The Hamptons

Dick: I feel like this is a "handout" that I need to give to all of my buyers!!! There is always a question or two about the condition  of a house but I like how you lay it out so that the questions are "stymied" before they become major issues in a deal! That saves a wealth of time and aggravation for an agent! Thanks and I can see why you got a big fat gold star!

Mar 23, 2013 09:52 PM #64
Rainer
26,997
New York HOME INSPECTOR Inspector Holmes
http://www.linyhomeinspection.com - Farmingville, NY
John Holmes

 I always tell Clients (Buyers) that findings are items you will need to expect to pay for. Most Homes have some issues, and Buyers and Sellers alike are aware of this.

 I dont really think The Inspection Report should be used as a bargaining tool. I see it more as a way to try to get insight into what to expect from your New Home.

  On the other hand though, if any Major Defects, or Concerns are found, such as Aluminum wiring, Knob and Tube Wiring, Foundation or Structural Damage are found then price negotiations should begin or Buyers have the right to withdraw their offer. These items are usually a suprise to both the Buyers and Seller so dealing with them is usually not disputed.

Mar 23, 2013 11:25 PM #65
Rainmaker
694,665
Clint Mckie
Desert Sun Home, commercial Inspections - Carlsbad, NM
Desert Sun Home, Comm. Inspection 1-575-706-5586

Hi Dick,

I had a buyer a couple weeks ago that had a home sale lost because the seller did'nt want o fix a thing. So my client walked a way from the home.

Then I inspected a second home for him. This time the seller fixed everything and the deal went through as planned.

On the first deal the home owners had a change of heart after loosing the first buyer. They have since fixed everything and new buyers are now wanting an inspection on the repairs that were made.

What a tangled weave we sow. If they would have fixed the repairs the first time the home would have been sold by now and both parties would have been happy.

Both buyer and seller needs to work for the best outcome for both the buyer and the seller.

Have a great day and a very good post,

Best, Clint McKie

Mar 24, 2013 11:06 PM #66
Rainer
301,104
Lehel Szucs
All Seasons Real Estate, Inc. - Covina, CA
REALTOR of choice

good post .... I wish all buyers would consider all sides of the issues when requesting repairs .... some are very unreasonable ... 

Mar 25, 2013 12:36 AM #67
Rainer
130,246
Carolyn Shipp
Source 1 Real Estate - Mineral Wells, TX
Mineral Wells Texas Real Estate

In Texas we have an option fee that can be paid for a specific period of time so that the buyer can do any inspections and determine if he/she wants to continue on with the purchase after anything is discovered.  If the buyer does not elect to take the option in the contract and discovers something after an inspection, he/she doesn't walk away without forfeiting his earnest money deposit.  

There is a section in our contract that if there is something that you want repaired or replaced you need to state that during the contract negotiations.  Otherwise, if you discover something during the inspection and the seller does not want to fix it and the buyer walks away, the buyer loses his earnest money.

 

Mar 25, 2013 03:48 AM #68
Rainmaker
1,431,631
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

In this market I generally tell my clients only to be concerned with big ticket problems that are discovered in inspections.   The exception is a flip put forward as turn key.  

Mar 25, 2013 04:16 AM #69
Ambassador
1,243,630
Kristin Hamilton CA Realtor
Sun Lakes Realty - Banning, CA
(909) 557-6966- Specialize 55+ Communties Banning

Hi Dick,

This is a great article and truly deserved a featured post. It is so important to know what to ask for and you brought up a lot of good points. I have received wish lists with 50+ things. What they did is go down the home inspection report and put every single item. I have my buyers pick the items that are health and safely violations and major items. Very minor things can be expected in any home including new construction. Great post!

Mar 25, 2013 02:03 PM #70
Rainmaker
511,378
Robert L. Brown
www.mrbrownsellsgr.com - Grand Rapids, MI
Grand Rapids Real Estate Bellabay Realty, West Mic

We are ALL trying to get to the closing table. That is the most important part of the transaction. Thank you..

May 16, 2013 04:48 AM #71
Rainmaker
2,946,414
John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Dick - Thank you for the excellent blog about FAQ #2 the inspection, what can I ask the seller to fix.

May 16, 2013 07:32 AM #72
Rainmaker
273,670
Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI

This is spot on. Handling repairs is usually the hardest part of a real estate sale.

Feb 09, 2014 01:12 AM #73
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