INSPECTION & REPAIR NEGOTIATIONS
Price negotiations are only the beginning. Once a contract is in place, there are documents, disclosures and inspections to get past. Any of these items can result in further negotiations and can make or break a deal.
Consider the possibility of post-inspection repair requests by the buyer(s) as well. The time to think about this is from before even the first offer, as you don’t want to negotiate a purchase price that leaves you little or no room for possible repairs or condition corrections. This single item is the cause for the vast majority of deal failures after a successful initial price negotiation.
The best and proper practice is to disclose any known defects to a potential buyer before they write the offer. This prevents them from claiming that the discovery of those items justifies a reduction in price, and satisfies the true disclosure requirements of a Seller. Not all defects may be known by you until an inspection takes place. Not all defects result in a price negotiation, but many do. I will work with you to determine what is the best course of action in the circumstance- whether you choose to make some repairs and not others, to provide a credit to the Seller, or insist on the sale as is and at the originally negotiated price. Each of these are viable options, and depend on the totality of circumstances and what is best for you.
My goal from the outset is to help you to avoid too many “surprises” related to condition and repair negotiations after inspections. I’ll do my best to give you information about what I see that buyers may want corrected, and in some cases may even suggest you obtain your own inspection prior to listing. This gives you the opportunity to either correct some issues before they are discovered by the buyer, or simply to disclose them in advance so that the buyer has taken them into consideration for their offer, making it more difficult to re-negotiate price. It is important, however, that whatever information you discover at whatever point in the transaction, be disclosed to buyers.
I want you to always be thinking ahead to inspections and repair demands from the first offer. Always be thinking of what may be coming in the way of inspections and repair negotiations, especially when the initial purchase contract price negotiations are in play. No matter how urgent your need to sell, if you go too far in price concessions at the beginning, you may have no room left when inspections are done and condition corrections are requested by the buyer.
Depending on the desires of the buyer and their selection of inspectors, there could be as few as a single inspector hired to do a thorough inspection of the home and all equipment supporting the home. However, there may also be other inspectors hired with a more focused goal, possibly a heating and air conditioning, septic and/or sewer, roof, fireplace etc. Each of these inspections will have deadlines for completion and submission of reports and buyer requests for corrections. My job is to keep the buyer on their schedule, and obtain the release of this contingency as early as possible. If a buyer is to back out of a transaction, I will work to protect your property from being off of the market any longer than necessary. (I will always continue to market your property for backup offers until all contingencies are released- the existence of an accepted backup offer can not only protect you from losing time, but can deter an existing buyer from aggressive re-negotiations.)
I have seen so many inspections that result in some form of surprise to the parties. That’s ok. My job is to handle the information, and work out a solution. Remember, your buyer generally is excited to buy your home and wants to live there. In most instances, we all want the same thing, and a fair, smart negotiation will usually result in that happening. This is an important step in the negotiating process, and you want me on your side for this!
CONTRACT TO CLOSING
Dozens of detailed tasks, document deliveries, deadlines, inspections and mortgage details are all in store between a price agreement, contract and a closing. I’m on every one of them and will keep your transaction organized and moving.
Most Sellers do not understand the complexities of handling a real estate sale from start to finish. To a Seller, the most important thing is often the price, and once we have a buyer who has signed a contract, they believe the hard part is over. It may be, but we must remain diligent in every step of the transaction. This is a legally binding contract, and both parties have legal obligations to abide by. I will make sure that you know what may be required from you, the deadlines for same, and give you any assistance necessary to comply with those. I know what every sentence in the contract means for you, and I take seriously every contract term, to ensure that errors or missed deadlines do not put you in a vulnerable position.
The process of taking a signed purchase contract through to closing involves a great many details, deliveries and document submissions. I coordinate all of this for my sellers, making sure that all phases of the closing process move along smoothly. Our office has an excellent transaction coordinator, as well, all provided to you as part of our services to make your part easy while we do as much as possible and make sure you are clear on each step of the transaction, and its impact.
- Title – I work closely with the title company to examine all items that may appear on your property’s title report, and review any relevant, recorded documents that may need to be addressed. Though the buyer is the one most concerned with receiving “clear title”, the Seller must be able to respond to or address any liens, transfers, etc. I have a high level of experience in evaluating and handling title issues as both an attorney and a real estate broker. If you do have an issue, I will help you understand it and to get through it.
- Inspections, Survey & Appraisal – I will be the one to coordinate access for the buyers’ inspectors and their loan appraiser, and to accept deliveries of reports, objections, or correction requirements from the buyers. I take this job seriously and will be with my sellers every step of the way. I will help you to respond to any issues, and demand timely performance by the Buyers on each issue and each release of contingency.
- Repair Negotiations – If the buyer submits requirements for corrective actions to items on reports, I work with my sellers to determine the cost of those requirements and the appropriate response necessary. Should you agree to make certain repairs, there may be additional deadlines and re-inspections. I will help you to keep your obligations timely, and to ensure that the buyer provides all documents and releases required, as they become due. Each of these releases brings you an additional step toward reassurance that the sale will close.
- Lender Document Coordination – One of the leading causes of delayed closings is some problem with funding due to lender last minute requirements or other document demands. I am monitoring all document flows to make sure this doesn’t happen for my sellers. Although the buyer’s agent should be monitoring this, we make sure to also be informed along each step of the lender’s process. If there is a problem, we need to know how significant it is, and ensure it is resolved. I can’t protect against every aspect of a lender’s process, and can’t guarantee that an escrow won’t have any delays- but, what I can do is work diligently to rapidly address any issues, keep pressure on the buyer to be responsive, and minimize the chance and/or scope of any delay.
- Title – I work closely with the title company and attorneys to make sure that all documents and deliveries are processed in a timely manner. I work with my sellers to examine all of their title and recorded documents to uncover all material defects and items of importance. Though this is normally of more concern to the buyer, sellers must respond to their objections, so it’s important to know what’s in all recorded documents. Example: while there are normally few items in a title binder that can be corrected as they’re recorded and pass with the property, sometimes there are requirements or exceptions that weren’t expected but must be addressed. With the more careful lending environment, more “quit-claim” deeds are being required as one example. Perhaps you have a previous divorce and the lender wants better protection against claims and will require a quitclaim deed from your former spouse.
- Inspections, Survey & Appraisal – My job is to coordinate access for inspectors and the appraiser, and to accept deliveries of reports as well as any objections or correction requirements from the buyers. I take this job seriously and will be with my sellers every step of the way. Every instance of delivery of an inspection and/or buyer objections requires a response in most cases, and there are deadlines. I stay on top of these deadlines, make sure reports are delivered to you on time or extensions are put into place, and that you respond within required time lines. Failure to do so could obligate you to repairs or other corrections or kill the deal.
- Repair Negotiations – If the buyer submits requirements for corrective actions to items on reports, I work with my sellers to determine the cost of those requirements and the appropriate response necessary to keep the deal going in a way beneficial to my seller clients. Should you agree to make certain repairs, there will be deadlines associated with completion, and possibly requirements for the buyer’s inspector to return and re-inspect for completion and repair quality. I keep all of this on track for you, and can recommend contractors I know do quality work at fair prices.
- Lender Document Coordination – One of the leading causes of delayed closings is some problem with funding due to lender last minute requirements or other document demands. I am monitoring all document flows to make sure this doesn’t happen for my sellers. As the seller, you aren’t getting a mortgage, but you need to be very concerned with the buyer’s ability to do so and their lender’s process and ability to meet deadlines and fund at closing. Mortgage problems kill a lot of deals, so we’re going to be involved in the buyer’s process to protect you, our seller client.