We got a contract on our 5 year old home. The buyers failed to get the inspection until the day AFTER the inspection period and we went ahead and granted them the extension. The same day we granted the inspection we got a full price CASH backup offer on the house.

The inspection notice came in today and the the inspector must have been justifying his existence.

here were their requests.
1. fireplace must be operational. (the inspector couldnt figure out how to turn it on) other than he must have missed the fact that there is a loop on a frame that covers the fireplace to reduce drafts I have no idea why he could not figure out how to turn on a self contained gas fireplace. Our response.. The fire place is operational. verbal explanation to buyer. Remove the cover, pull down the grill, light the pilot light, turn it on. It worked all winter when the house was on the market.

2. Level AC unit. It sits on a gravel pad some rock has slid out from under the plastic “pad”. Our respones… No.

3. Bolt deck to house. It a 5 yo house the deck is solid. it has 5 columns to the ground and stairs. The bolts are $2.59 a piece and IF i were EXTRA OCD I’d have to put 40 in for a total of $100… Our response… No

I think these are as you mentioned knick nack things that really are not life safety. the house is not going to burn down and the mechanical system is fine.

Am I wrong? The difference between the offers is only $5000 so its not like i’m looking for a way out. Closing for either of our contracts are within 3 days of each other so we are still out of the house by the end of May.

Any feedback would be greatly appreciated.

The Option Period is intended to provide an inspection and due diligence period, though it does serve as a “walk-away-for-any-reason” clause. Yes, it’s fair as it compensates the seller for removing the home from the market and also serves to make buyers think twice about trying up multiple properties with offers, since they have to cough up earnest money and Option Fee on each one.

If you found a house you like, why would you want to keep bidding others?

Steve

I can’t comment on or advise your negotiations. Your agent should be able to do that. But I do wish you luck.

Steve

If the bad slab was unknown and not factored into the offer price, it’s not unreasonable. It would be an expected request for the seller to cure it, or compensate for the cost.

On the other hand, the seller is required to do nothing. Your recourse is to terminate the deal. Yours and the seller’s agent should be able to help you and the seller negotiate a win/win.

Steve

Good Luck,
Raul

It doesn’t surprise me that the listing Realtor lost his cool. I would simply have your agent present your rationale, and try to leave emotion out of it. It helps if you have a strong number 2 choice that you can pursue. Sometimes stubborn sellers get their way because the buyer has already emotionally attached themselves to the home and is loathe to walk away.

I’d simply add up all the unexpected costs, add that amount to the contract price, and ask yourself if you are willing to pay that amount for the home. Is the home still worth it?

On the other hand, if what you describe is what might be found in the next home you pursue, walking away might not be wise. But it is VERY important to know and understand what you are really paying for the home, and that cost includes the curing of neglected mechanical equipment.

Good Luck,

Steve

Interesting article. I’m from the east coast and currently in the negotiation process resulting from the home inspection. Our inspector identified some major issues with what I like to call the “lifeblood” of the home. For example, a 22 year old furnance (2 years past its useful lifecycle IMO), a 22 year old hot water heater (10-12 years past its lifecycle IMO), a AC unit approaching 15 years old (15-17 yr lifecycle IMO), and a 75ft tree that is clearly dying. We actually submitted a request to replace the HVAC, hot water heater and remove the tree. We figured if we are about to pay Ferrari prices why should we be stuck with the impending bill to replace old, outdated and soon to be less than efficient systems in addition to a major safety hazard.

Of course I don’t expect the seller to agree to this, but never expected the realtor to lose his cool with my realtor before he even discussed it with his clients. In your opinion were we out of bounds or were we doing nothing more than any other person would do wrt identifying major flaws with a home priced in the mid 600K range with the expectation that we ask for it all knowing we’ll be negotiating a viable solution for all parties involved?

I agree with you on this point. If a home is advertised as “fully remodelled”, there are certain aspects of a remodel that are assumed. But in the end, we see a lot of “rehabs” that are simply cosmetic treatments that leave the underlying components of the home in original condition. It still comes down to a negotiation between the buyer and seller.

Steve

As for your 1970s house example with Aluminum wiring, it is reasonable to ask for an electrician to double check things, especially the junction box and possible have it replaced. A crummy (or incorrect, say one for copper wiring) junction box is the case of many of problems with Aluminum wiring. Sometimes tightening the screws in the box is in order to sure things are safe.

Sellers, be prepared for a long list of things the buyer might want fixed. You probably asked the same of the previous seller. Its all part of the game with all the parties that are involved (far too many if you ask me – realtors, title company, lawyers, banks/mortgage brokers, home inspectors, insurance agents, county tax assessors, city of austin now).

Case in point — when we bought our house last year, the sellers has already moved out and had a temporary tenant. The house had been on the market for nearly a year; overpriced and already had a $50k reduction when we came along. We saw a house that had had some updating but still had much left to do, and there were quite a few deferred maintenance issues (the loose gutter by the entrance and overgrown landscaping obvious ones). So our view was that we were buying a project house with good bones. We negotiated somewhat agressively on price to get a good, not great deal according to our agent and the available comparables.

Of course, from the sellers’ perspective, they had a house in great condition that they had renovated and were giving away. Our inspection came up with a long list of items, some of them of the type Steve say shouldn’t be included like out of code items. But others were maintenance problems or issues due to faulty workmanship in the previous renovations. The repair cost came out to $12k — very reasonable from my perspective. Not to the sellers, of course. If I hadn’t been very flexible on assuming most of the repair costs, it is very possible the deal wouldn’t have gone through. In the end, I got a reasonble closing price on a house that was good for us — but that remains a series of improvement projects. The sellers, I am sure, feel they gave the house away (especially given the high initial asking price).

So, long story short, it is good to have a discussion about reasonable things to ask for, but these issues are rarely cut and dried given the imprecision in pricing and issues that come with older homes.

Yes, I wish pre-inspections were common practice in Texas. It makes a lot of sense. We have seller perform one when the property has a lot of deferred maintenance, but it’s fairly rare to see pre-inspections in our market.

Steve

Maybe it is just a difference in business practices between real estate practitioners in California (SIlicon Valley) with those of Texas, but our listing agent’s typically have the seller get pre-listing inspections prior to putting the home on the market. This gives the seller a better idea of potential costs/issues that might come up. These are also given to the buyer prior to any offer presentation so that the buyer has an idea as to the home’s conditoin prior to writing an offer.

Pre-listing inspections fon’t proclude the buyer from doing his/her own inspections, but rather it adds the seller’s disclosure on the property’s condition. The more information, the more comfortable the buyer feels about his/her purchase.

Once a contract is ratified, it is more likely to close because there are less unknowns about the property. I highly recommend having my seller’s spend $600-$800 up front to eliminate substantial costs (could be in the thousands of dollars) down the line because the buyer wants to re-negotiate.

talking about taking the words from my mouth!!!

human nature is what it is…
human emotions are what they are…

examples:
multi-multi multi millionaire finds the perfect house… i always use the “hide $2,500 under your mattress for the repair issues the seller may refuse to fix”… the inspection turns up virtually nothing!!!…. cept the few windows looking out to the lake that are fogged (only at certain times of the day/year/sun position…)… $1,900 estimate to replace these widow glasses!!!…. the seller says “we came down to meet your offer price… we will not fix the windows… we have lived here since the home was built and NEVER have seen any problem with the windows”… so i talk with the buyer about that $2,500 under their mattress… the buyer says “i am not going to buy this guys house!!!”…. (contract terminated… both buyer and seller have remorse… i get them talking… they both apologize… go to closing)… i forgot to mention the fact that the seller also used the fact that they spent $6,800 on an outdoor grille… and that the buyer should be happy with the fact that the grille was conveying… BUT the buyer replied back (against my suggestions) that they didn’t give a hoot about the grille… SO THE SELLER TOOK A SLEDGE HAMMER TO THE GRILLE!!!!!

but… SO many other deals have just died…. EMOTIONS run rampart… intelligent thought disappears…

i could go on for another 100 pages….
some get to closing… some don’t…

one other “deal”:…. retired military buyer… contral FREAK!!!…. we find the perfect house…. $100,000 under valued (buyer knew it upon first step into the property)… everything going ok…. a little rough during option/inspection…. we get through it… 1 week from closing the buyer calls me to tell me that they are NOT going to buy the house if the seller does NOT fix the deck where the hot tub was removed (1 year old $12,000 hot tub)… buyer just didn’t want it… contract called for seller to remove it…. I SCREWED up and did’nt addess deck repairs after removal!!!… (live and learn!!)… buyer was adament…. terminated contract… threatened to sue seller for earnest money (past option period)… buyers wife almost had a nervous breakdown…. she KNEW this was a 1 in a million bargain!!!…. she actually took off 1 week from work and cried!!!!…. the seller IMMEDIATELY got another full price offer…. … … … … … listing agent called me 3 weeks later to tell me the unthinkable happened… new buyer lost job!!!!…. i called my buyers to tell them…. AND HUSBAND STILL INSISTED on seller repairing deck!!!!!!!!!!!!!!!!!!!!!!!!!……. long story short… I paid the $1,500 out of my pocket to fix the deck!!!!…………

PEOPLE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!