Contract negotiating - FSBO (after offer was accepted) (Howe: real estate, how much)

[blincbo]

At this point we didn't hire yet real estate attorney. Real estate agents are not involved in this transaction.

I need tips (maybe someone was in similar situation?) on negotiating contract if inspection finds issues with the house.

Is real estate attorney should handle negotiation or we (buyers) should contact sellers and tell them if we want to repair / replace things that inspection might find needs to be taken care of.

[TexasHorseLady]

Negotiations should have been handled (including anything regarding repairs) by your real estate agent or an attorney or yourself BEFORE the offer was accepted and went to contract. Without seeing what the contract specifically says, it's going to be impossible for anyone to give you good advice on how to, or whether it's even possible to, negotiate repairs or get out of the contract (do you have an option period that you paid for and are you even still in it?) at this point.

Most transactions for residential property in Texas don't involve attorneys (except for the title company's attorneys); real estate agents represent both parties except in very complicated transactions. The seller generally pays their agent, who then offers a portion of that commission to the buyer's agent to bring the buyer (the buyer's agent handles negotiations and represents the buyer's interests).

However, at this point, since you entered into a contract, the best advice is that you immediately find a real estate attorney and pay him or her to look over the contract and advise you as to what you can legally do now.

[blincbo]

Thank you, THL. We're still in option period.
I'm not sure why you saying that things can not be negotiated during option period?

My question basically was if someone w/exprience recommends to hire a lawyer to handle negotiation or not?

[jenkirk]

Are you using the promulagated forms? It sounds like it.

Now you just negotiate the repairs. You get licenced professionals to come out and give you estimates - then sit down with the sellers and see who pays for what. Also be sure to check for termites - they have been very bad these past two years.

[TexasHorseLady]

The option period is not a time for negotiations. (Contrary to what many agents seem to believe; there was a very interesting article on that on I believe it was the Texas Association of Realtors magazine site recently, and on how many agents have this misconception.)

At the time you write the offer (not after it's been accepted and is already a contract and you're in the option period), you can write into the contract that the property is accepted subject to certain repairs, or to repairs to be negotiated based on a professional inspection. At this point, the seller will often write in a dollar amount limitation on such repairs (if they're well-represented). Then, under those circumstances already in the contract, what repairs can be made can be negotiated.

The option period means that the buyer has the right to walk during that period. It does not mean that negotiations are still ongoing unless specified already within the contract as above. During the option period, the buyer can walk. They can ask the seller to make certain repairs, but the seller is under no legal obligation to do so or, for that matter, to even negotiate them. Again, unless that is written into the contract in the first place and all parties have signed off on it. If it's not, and the seller declines to make the repairs, then the buyer's only option is to walk or accept the house as is.

That's why it's critical how the offer is written in the first place and why only someone who's seen the contract (promulgated or not, and the promulgated forms are "intended for use by licensed real estate professionals", as it says right on the bottom of the form) can give you good advice on what your options are now.

[jenkirk]

Consumers still use the forms. It is not recommended, but it is not illegal.

Also repairs can be negotiated during the option period, as they usually are. It is better to put something in the special provisions about repairs, but as you know most realtors do not.

We had this discussion/argument at my brokerage and some of the realtors made a good point that it really does not matter what verbage you put in there - unless the property is preinspected. Also it is great to set a dollar amount, but really does it matter if the buyers walk when more issues are found during inspection. The reason to put something in provisions is so everyone has the same expectations.

[TexasHorseLady]

Jenkirk, I, too, thought that the option period was free for negotiation on inspections, but evidently it's not - or, it's not a given that you can get repairs done. You can attempt to negotiate repairs during that period with an addendum, but if you haven't written it into the condition or special provisions, there's nothing requiring the seller to agree to anything. And you definitely can't renegotiate the price during that period, though agents do try to do this, as well. Works until they come up against someone who's either studied up on it or been bit by it in past (the most effective and long-lasting way of learning something ).

I'm not saying that it isn't done all the time, just that it's not quite how the contract is actually written on the promulgated form.

And how on earth does someone say that it doesn't matter what verbiage you put into a legal contract (which is what the offer becomes once it's been signed off on in the first place, before the option period starts)?

[jenkirk]

I understand what you are saying, but as long as a buyer can walk and only lose some paltry option money - negotiations are still open.

Now if you are talking about a multiple offer situation on a hot property, this may not be the case. However your contract would not have been likely to be accepted with repair verbage in the special provisions.

Also he was asking for advise - which is what I gave. No need to beat him up for not using his realtor.

Just look at my old posts, and you can see my own experiences as a FSBO. I would not recommend it to anyone. I still learn something new everyday in real estate. It is amazing how much can go wrong. We rely on people being generally good, but unfortunately there are a lot of bad seeds out there!

Also many people would give up the farm, so people do not think negatively of them. If you are a people pleaser, being a FSBO is really a bad idea.

[TexasHorseLady]

I'm not beating him up for not using a realtor. I just told him that if he has a contract, then only someone who is actually looking at the contract can tell him what his options are in this particular situation. Especially in the situation above - as you say, it would be nice if everybody we run into and do business with were good,but there are those bad seeds.

And that, yes, at this point he needs to hire a real estate attorney to look at the contract and give him that advice, as we Invisible People on the internet are somewhat hampered by our mutual invisibility!

[centralaustinite]

I am hoping that the offer was accepted contingent on inspection, yes? A contract can be written that takes the property "as is" with no negotiation over any inspection items.

Have you had the inspection done? Are there major issues -- foundation, roof, HVAC, termites? Do you have a sense of what comparable properties have been selling for? Was there a seller's disclosure?

if there is big stuff that came up in the inspection, then get estimates from contractors, and you can use them to try to negotiate changes in the price. Don't let the owner fix any major items themselves, you want to pick your own contractors, supervise the work, make the crucial decisions yourself.

If you feel like you are in over your head get an attorney to read the contract and advise you, fast! If the repairs are extensive and you are in the option period, you can always walk away.

good luck!
s
(not a real estate agent or attorney!)
DM me for attorney names if that is what you need)