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I got a full price offer with an addendum (I think that's the term) that I pay for roof, septic, well, water, termite inspections and general home inspection. I countered for an additional couple thousand to cover inspection cost. (California)
What is the seller legally required to produce?
In our area, normally buyer pays for the general home inspection, and owns that inspection. Roof is usually included in that.
In our area also, a septic inspection is required in this county within the last 12 months, and normally seller pays that one.
The others can be negotiable and I've seen both, but usually, if buyer needs it and it's not required by rule or statute, buyer pays.
In any case, you're not wrong to counter with it. The only issue might be if buyer does not have the cash to pay the inspections out of pocket.
If they're conventional and not asking for closing costs, that shouldn't be the issue.
In our area, normally buyer pays for the general home inspection, and owns that inspection. Roof is usually included in that.
In our area also, a septic inspection is required in this county within the last 12 months, and normally seller pays that one.
The others can be negotiable and I've seen both, but usually, if buyer needs it and it's not required by rule or statute, buyer pays.
In any case, you're not wrong to counter with it. The only issue might be if buyer does not have the cash to pay the inspections out of pocket.
If they're conventional and not asking for closing costs, that shouldn't be the issue.
The only issue might be if buyer does not have the cash to pay the inspections out of pocket.
Yup. Even with conventional lending, it may be helpful to the buyer to reserve some of the cash stash for moving, painting, other costs.
And, with cheap money, the buyer may love to finance the inspections.
Too often, folks lose sight of that fact that it is all just a "negotiation," and totals count far more than quibbling over line items that take you to the totals.
Two possibilities. The first is that your potential buyer is a novice and so is their agent. It makes no sense for them to put this in a contract.
The second is that they are purposely planning to cheat you. Imagine that they have friends they designate as inspectors. Then pay them 5000 a piece for each of those inspections. It’s too open ended. Their inspectors might even be set up to give the buyers a 90% kickback.
Two possibilities. The first is that your potential buyer is a novice and so is their agent. It makes no sense for them to put this in a contract.
The second is that they are purposely planning to cheat you. Imagine that they have friends they designate as inspectors. Then pay them 5000 a piece for each of those inspections. It’s too open ended. Their inspectors might even be set up to give the buyers a 90% kickback.
Good point. If you are paying you should get to pick, or if they are picking it should specific as to the max you'll pay towards inspections.
I read in the OP "I countered for an additional couple thousand to cover inspection cost." That sounds like a fixed dollar amount added to the purchase price.
That isn't a promise to call or make the appointments or pay them directly.
Definitely want to be clear on that potential expectation.
Two possibilities. The first is that your potential buyer is a novice and so is their agent. It makes no sense for them to put this in a contract.
The second is that they are purposely planning to cheat you. Imagine that they have friends they designate as inspectors. Then pay them 5000 a piece for each of those inspections. It’s too open ended. Their inspectors might even be set up to give the buyers a 90% kickback.
Eh.
Those are two possibilities, for sure.
However:
1. I wish novice agents were not nearly the issue that "seasoned" agents are. Incompetence engrained through a longer career is much harder to deal with.
2. That is why ALL negotiated dollars in a contract stipulate an exact amount or exact limit. Never open the checkbook with "pays all inspection fees."
Offer price is acceptable at $900,000?
Buyer wants $5,000 credit for inspections, and seller is amenable to that possibility?
Seller: "It all sounds good. $5,000 credit at closing. We are in agreement on terms. Make it $907,500, and let's get it done! Thanks!"
Last edited by MikeJaquish; 03-03-2022 at 12:17 PM..
I think in CA, sellers pay for the pest and dry rot inspection but buyers pay for all the other ones. I think they are required to give a clear P&D to the buyers.
Eh.
Those are two possibilities, for sure.
However:
1. I wish novice agents were not nearly the issue that "seasoned" agents are. Incompetence engrained through a longer career is much harder to deal with.
2. That is why ALL negotiated dollars in a contract stipulate an exact amount or exact limit. Never open the checkbook with "pays all inspection fees."
Offer price is acceptable at $900,000?
Buyer wants $5,000 credit for inspections, and seller is amenable to that possibility?
Seller: "It all sounds good. We are in agreement on terms. Make it $907,500, and let's get it done! Thanks!"
1- I'll second. Some of my best deals have been with new agents, and also some of my worst. Those new agents that ask questions and are coachable tend to do their job fine. Some of my worst deals are with new agents that think they already know it all and come to the table ready for battle. They aren't coachable and can invent news ways to blow up a deal it seems.
The same is true for experienced agents. Some of the very worst to deal with are the 30 "veterans" who still run their business the same as they did in the 80's and 90's and refuse to adapt. Some of them are also quite good at, and seem to expect the listing agent to do their jobs for them. I don't always end up getting along with them well by the end of the deal.
2- Our contract has a well written section on inspections and repair addendums, and sometimes agents try to add their wording which muddies it up. I hate when I get offers with phrasing written in such as "Seller will provide a clear CL100" or "Contract contingent on inspections", etc. The first or anything like it is a blank check if there are issues and the seller has no out. Some hard headed agents don't understand that on the buy side. I've a had a few offers not make it to contract because we couldn't agree on that phrasing, but I have to protect my client.
The second phrase is problematic becuase 1-it's already covered and 2-by writing in that section it supersedes the inspection section of the contract in event of a conflict. So does contingent mean it's simply contingent on the house being inspected regardless of findings, or contingent the buyer approving the inspections? When do the inspections need to be completed and who does them? What inspections will be done and who pick them? You get the idea...but I get garbage in contracts like that far to frequently.
I wish our industry would better educate the public on how to find quality agents. That'd be about the only way to drive the bad ones out.
I wish our industry would better educate the public on how to find quality agents. That'd be about the only way to drive the bad ones out.
The business model where firms take on agents right out of class, charge them $300 to sign up and $99/month to hang their license, throw a library of "self-paced training text and video" at them and turn them loose as cannon fodder is a pox on the business.
Buyers normally pay for all inspections--with the exception of those which may be required to transfer a property (such as for septic).
Adding $2,000 to the price does you no good if they fail to close--you'll be out the cost of the inspections. Also, with little invested in the transaction, they may be more inclined to walk if the inspections reveal issues, even minor ones.
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