Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
So the house was on the market for two weeks back in December and was taken off the market b/c of the holidays. It came back on about two weeks ago, but the whole time we were verbally negotiating with them back and forth and we got them down $5K from their list price. They're also putting in $11,500 towards closing, so that's why we're a bit nervous. Our other option would be to negotiate a lower price, but hooray for a cheaper mortgage, but the problems are still there you know?
Sounds like a desperate seller, to come down 5K and then offer 11.5 in CC, after a month or so (at the worst time of year) on the market.
Take whatever you can get, but dont be surprised if they stand firm on the majority of items (I would if I was the seller, based off the reduction/credit they've given you). On the other hand, they could rally be desperate and in turn, willing to do whatever to get the house sold. Your agent should have been able to feel the listing agent out some.
Get them to have a licensed roofer over to inspect and correct everything they find, up to a new roof.
Get them to replace WH and bring it up to code if necessary.
Get them to have panel inspected by licensed electrician and correct everything they deem necessary.
Service the HVAC and get a home warranty at closing and hope it fails in the first year.
My two cents.... On an older house that has not been updated, the sellers are not likely to make it into a new house for you. They hopefully have instead priced it well for the condition it is in. They are not likely to replace systems that are old, but working. If they wanted to do that, they probably would have remodeled it completely and sold it for a lot more money.
I would focus on those items that will be flagged on appraisal for your loan. If FHA loan, then the roof and GFCI plug will certainly get flagged... (the GFCI plug is about a $5 fix) and whether the panel, rust and lack of support on the deck will get flagged also depends on their particulars... how bad they are. With the sum total, this one almost sounds like it's a candidate for a rehab loan, not a standard VA, FHA or conventional loan.
If you are buying without a lot of cash available to make repairs, this house may be a big risk for you. This sounds like a house that is going to need some money put into it in the short term. Beware buying into a house you can't afford to fix when things break. Each of these issues may cost a couple to several thousand dollars to fix.
Last edited by Diana Holbrook; 01-22-2018 at 09:22 AM..
My two cents.... On an older house that has not been updated, the sellers are not likely to make it into a new house for you. They hopefully have instead priced it well for the condition it is in. They are not likely to replace systems that are old, but working. If they wanted to do that, they probably would have remodeled it completely and sold it for a lot more money.
I would focus on those items that will be flagged on appraisal for your loan. If FHA loan, then the roof and GFCI plug will certainly get flagged... (the GFCI plug is about a $5 fix) and whether the panel, rust and lack of support on the deck will get flagged also depends on their particulars... how bad they are. With the sum total, this one almost sounds like it's a candidate for a rehab loan, not a standard VA, FHA or conventional loan.
If you are buying without a lot of cash available to make repairs, this house may be a big risk for you. This sounds like a house that is going to need some money put into it in the short term. Beware buying into a house you can't afford to fix then things break. Each of these issues may cost a couple to several thousand dollars to fix.
Yeah, we fully understand that no home is perfect. We pointed out our concerns, they have 3 days to respond, and depending on how that goes, we'll decide if we continue to pursue it. So far they have been motivated sellers, so we'll see what happens. This is our first home, I come from city living, condos/apartments and I didn't really have to worry about stuff like this, so it's a bit of a culture shock.
As for the price, this is something we went back and forth with. This house is 20K over what the last end unit townhouse sold for (back in October). We don't believe they priced it accordingly.
On a 22 year old house, I assume they priced it according to the condition and you offered accordingly (if not, you should have negotiated a lower price up front, as 22 year old furnace and water heater should be pretty obvious during your viewing of the house, unless they are somewhere inaccessible, like the crawl space or attic). So I probably wouldn't ask for those, I'd just go in expecting to replace them. Same with a 22 year old roof. Max life for most shingled roofs is 30 years, so I'd ask for the missing shingles to be replaced for sure, but go in knowing you'll have to replace sooner than later.
I would definitely require the electrical panel be repaired AND the source of moisture found and repaired. The GFCI is a minor, quick fix, so have that done while the electrician is there.
If the deck was poorly built and isn't safe, I would ask for that to be fixed, but honestly, this is likely something you could do yourself, after closing.
To me, the uneven floor, although no one else mentioned it, is something I would want checked out. On 100 year old houses, the floor is normally uneven, but not 22 year old houses. WHY is the floor uneven? Is there a missing support in the crawl space? Has a floor joist been cut? Is there rot? If it is on a slab, has the slab settled? Maybe it is nothing at all, but I'd want to know why before just ignoring this problem.
If you can't afford to put on a new roof/water heater/furnace in the next 5-10 years, you should be looking at newer construction, as those are costs of homeownership.
The other possible option is you could try to raise the price back up the $5000 you negotiated off, but get them to replace the furnace and water heater for you out of their proceeds. You'll still have to replace the roof sooner than later, but a repair could get you 10 more years.
Unless there was specific language in the offer (saying, for example, that the sellers agree to fix things that cost less than X$) you are into a completely new negotiation.
Best for you is if the seller is so desperate they will fix everything, or give you a very substantial discount. But they can also refuse to do anything at all, in which case your choice is to take the original deal or walk. Or anything in between.
You, and your agent, need to make a judgement based on specific circumstances. How desperate is the seller, what is the local market like, etc. etc. Try to imagine yourself in the seller's shoes: what would you agree to? Where would you balk?
Sellers are less likely to agree to fix things that cost a lot or require lots of work to find contractors on their part.
Good, as the first house might have been difficult to negotiate the repairs based off your communication with them before.
Did you give them full price, or negotiate any closing cost credit? How long has the house been on the market?
Concerning the items you listed, roof/water heater/elec panel would be my main focus. If it needs a new roof (and not just random shingle replacement etc), you're looking at $8-10,000 most likely for these three items (roof, WH, panel replacement). My contractor is around $1,000 for WH, depending on size/gas or elec, and if it needs anything to bring up to current code.. Elec panel is $1,500-2,000 depending on house.
The seller might not have room to do those repairs, especially if you negotiated money off the price or got them to cover some of your closing costs.
The HVAC could be pricey too, but again, the seller might not have the room to do all of these (although the listing agent would have hopefully caught some of these items up front and adjusted price accordingly IMO). I have a hard time signing off on a replacement for something working, like an HVAC, where a servicing might suffice from a technicians opinion.
I agree with everything kww said. Sellers are usually hesitant about addressing A/C units that are working. Roof, water heater, electrical panel? I suggest you approach the seller with those items, keeping in mind what how flexible you are in the negotiations.
Seller doesn't have to take care of any of it. But its a bit of a tightrope walk for them. They could:
Do nothing - you walk away. They have to disclose these findings to future buyers
Fix some of it, don't move on price, you walk away. See above.
Some mixture of move on price and fix some of it - you come to terms
The only risk the seller has is the disclosure if you don't buy the house in the end. If the items ARE minor, then no big deal, right? But, keep in mind that his future buyers will see these disclosures before they bid. Which puts a blemish on a house and its sale price while buyers are supposed to be starry eyed on buying with their heart instead of their head.
So, as a buyer you have some leverage. Generally speaking, I'd expect things to be fixed so the house is move-in ready: like the shingles so there are no leaks. But the water heater? If it is "just old" but still functioning, it might be a hard sell. The best I'd expect is maybe a concession on the price to drop it a little bit in anticipation of the chance it will fail soon.
Reasonable is anything that would be a safety issue as far as repairs. Other than that to ask for things like a septic or heater to be serviced/inspected is usually reasonable if it hasn't been done in the past twelve months. Those are major. How is the house priced to begin with?
If you don't ask, you don't get. You should have a dollar figure associated with the items. They can either fix them, discount the price accordingly for items they will not address or they will remind you that the property is listed and priced as-is and not do anything. Inspection results are often a key negotiation item prior to writing checks.
I once purchased a home from a couple who loved to negotiate. After the inspection results, they countered the results with their own itemized list down to staples and a tube of caulk.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
