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We are currently working with a realtor on putting in an offer on a house. We want new carpet put in the house prior to closing. We aren't sure how this should be worded in the contract. We were told that the seller has to be the one to order the carpet. We want to make sure it is clear that the seller is completely responsible, including ordering and payment of the carpet, in the contract. Any advice would be appreciated! Thanks!
There are any number of ways to address this issue. You could have the Seller order and install the new carpet, or you could have the Seller negotiate a "not to exceed" amount with a local carpet company (essentially a credit to you from the carpet company) and allow you to choose the carpet, or you could just negotiate a credit at closing (fixed dollar amount) to be held in escrow and paid to the carpet company upon completion of the work with any excess charges paid by you directly. Or other?
Do not be afraid to negotiate a deal that works for both you and the Seller. Then just include it as part of your contract.
Just make sure you specify How it is to be done, when it is to be done and how much it will cost each party. Be specific, not ambiguous.
I don't understand why you're making this so complicated. Just factor needing new carpet into your offer, deducting whatever you see fit before making your offer. You can have your agent explain to seller's agent your reasoning in the seller's bad carpet as a negotiating point for a lower price.
I'm selling and I could see that my carpet was crap. I had new carpets installed from Home Depot. The new carpets were a positive factor in my time on market and the buyers mentioned it as one of the points that encouraged their purchase decision. (This advice is offered for others considering selling their houses if they have bad carpets.)
I don't understand why you're making this so complicated. Just factor needing new carpet into your offer, deducting whatever you see fit before making your offer. You can have your agent explain to seller's agent your reasoning in the seller's bad carpet as a negotiating point for a lower price.
I'm selling and I could see that my carpet was crap. I had new carpets installed from Home Depot. The new carpets were a positive factor in my time on market and the buyers mentioned it as one of the points that encouraged their purchase decision. (This advice is offered for others considering selling their houses if they have bad carpets.)
That is a well written post, Lovehound. New carpet doesn't equal 'more or less' value.
(To the original poster) In Louisiana:
Per your situation -
It can be an allowance; inducement to sell. Economically speaking, it is an incentive. Contracts here in my state, usually have a place to account for these type of items, as well a place to write in the amount/consideration; it can be written in as an 'additional term' in order for a sale to take place. In another words, a consumer can pick the carpet out, and have the seller, per contract, provide the funds for you, as a condition to sell.
It just has to be agreed upon...
As for as Value: Seller/Buyer behavior may influence a change in price due to "carpet," but it is a "rarity" in my area (if any at all), according to my observations. It will be more in line with 'condition,' but it will be a small 'blip' on the radar (if any at all).
Last edited by Greeenback; 03-16-2011 at 02:24 AM..
Actually, we see this frequently. As long as it's spelled out in the contract, and the appraisal is ordered with this information, it's a non-issue for the loan. What we typically see is very similar to the way new homes handle this - with a twist.
First, ask the flooring company to meet with you at the home with the seller there. Write up the order - give them a credit card, if necessary, but tell them you will be replacing it with cash and want the card credited back at that time. You can also do the 0% financing. Anyway, get the order pulled together, but don't give the green light. Most places can deliver quickly. The next step is to get the loan approved with every condition met. Move fast. Get the appraisal done, which will be subject to the carpeting being installed. Last step (and hopefully the day before closing), get the final inspection by the appraisal, submit the invoice to the title company for payment and close.
Find a lender that can work with this scenario. It's not unique, but the big boxes probably cannot handle it.
Sounds like the buyer want the cost of the carpet rolled into the mortgage instead of paying out of pocket. Does not make sense to me to pay for carpet over 30 years WITH interest instead of having it installed after using a "credit" offered by the seller.
We are currently working with a realtor on putting in an offer on a house. We want new carpet put in the house prior to closing. We aren't sure how this should be worded in the contract. We were told that the seller has to be the one to order the carpet. We want to make sure it is clear that the seller is completely responsible, including ordering and payment of the carpet, in the contract. Any advice would be appreciated! Thanks!
I agree with Lovehound.
The way you've written it here, you're likely to get the absolute cheapest apartment quality carpet and padding available and you may not be eligible for whatever warranty the stuff may come with. A lot of those type of things apply only to the purchaser.
Some people seem to think the cart looks good in front of the donkey.
Probably the buyer wants to get the cost of the carpet included in his mortgage. Maybe he should see if he can get the seller to pay his closing costs too.
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