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Old 06-13-2014, 02:44 PM
 
7 posts, read 25,728 times
Reputation: 12

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We just put in our final offer on a parcel that we are relatively sure will have "issues" during the inspection. We are actually buying the parcel for the land and water, not for the existing house, but the Seller didn't move down quite as much as we had hoped. My husband thinks we can probably accomplish the price reduction from things found during the inspection.

Is this an often used tool? In reality we could care less about anything being fixed - we plan to raze the existing house and build a new home. It's just too bad the existing house is in the money shot for beautiful mountain views.

Here in Colorado we are using a transactional broker - he is both the Seller's Agent and our (Buyer's) agent, and suspect he has played both ends against the middle. We will insist on our own inspector, and not someone the broker has "connections" with...probably not a easy feat in the rural community where the property is located.
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Old 06-13-2014, 02:50 PM
Status: "Open for work" (set 9 days ago)
 
Location: Just south of Denver since 1989
11,822 posts, read 34,355,412 times
Reputation: 8950
The Broker you are using is not your agent if he is a Transaction Broker.

Use any inspector you wish. Use more than one - HVAC, roofer, plumber, electrician...

But to use the inspection as a tool to reduce the price when you plan to scrape is disingenuous.
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Old 06-13-2014, 02:59 PM
 
Location: Brentwood, Tennessee
49,932 posts, read 59,754,614 times
Reputation: 98359
I agree. What if they agree to repair any items you contest and refuse to reduce the price??

Just offer what you think it is worth.
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Old 06-13-2014, 03:21 PM
 
Location: Bloomington IN
8,590 posts, read 12,288,275 times
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This tactic is not often successful--particularly if the seller didn't come down in price more during negotiations. The seller may very well offer to make repairs.
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Old 06-13-2014, 03:45 PM
 
Location: Scottsdale, AZ
2,151 posts, read 5,157,868 times
Reputation: 3303
If you know for sure you are going to tear down the building, why waste money and time on inspections?

What if the seller says no to the repairs, will you cancel, after you have spent money on inspections?

What if the seller says they will repair the problem? That would be a waste of money for both of you.

I always caution when trying to use inspections to reduce the price, as opposed to requesting repairs. From a legal stand point you are reopening negotiations. The seller could say "Yes, I will reduce the price, but you must increase your earnest money (just an example)". Then what will you do?

If you really wanted to pay less, you should stick to your offer price, take it or leave it. Playing games after agreeing to terms will likely just come back to bite you.
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Old 06-13-2014, 03:51 PM
 
Location: SoCal
14,530 posts, read 20,054,132 times
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Inspection makes absolutely zero difference on a tear down, particularly if the seller realizes it's a teardown.

If you inspected a teardown it should have been a demolition quote.
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Old 06-13-2014, 04:19 PM
 
Location: Central Texas
20,958 posts, read 45,298,124 times
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Enough people are under this misconception here (including, apparently, some agents) that the Texas Association of Realtors has written about it, making it clear that the inspection is NOT a tool for price negotiation after a price has been agreed upon. Repairs can be negotiated, not price.

Is this a cash deal? Because your lender, if there is one, is going to want to know that you are planning in advance on tearing down the house that they're making the loan on.
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Old 06-13-2014, 04:24 PM
 
Location: Berkeley Neighborhood, Denver, CO USA
17,692 posts, read 29,691,842 times
Reputation: 33265
Default Not true

Quote:
Originally Posted by 2bindenver View Post
to use the inspection as a tool to reduce the price when you plan to scrape is disingenuous.
It is not.
It is nasty.
But, this is a transaction where everyone is an adult.
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Old 06-13-2014, 04:29 PM
 
Location: SoCal
14,530 posts, read 20,054,132 times
Reputation: 10539
Quote:
Originally Posted by TexasHorseLady View Post
Enough people are under this misconception here (including, apparently, some agents) that the Texas Association of Realtors has written about it, making it clear that the inspection is NOT a tool for price negotiation after a price has been agreed upon. Repairs can be negotiated, not price.
In any state call it what you want. There is a contract price. There is an inspection. Inspection shows $3K repairs will be needed. Seller agrees to correct the defects or issue a buyer credit. Is the buyer credit a price reduction? Not really, but in effect it is.

There is a contract price and that will always be the contract price unless the deal fails. All there is after that is addendum to modify the original offer. Generally they show as buyer credits at COE.

Hey, if they lowered the contract price then buyer's and seller's agents would lose commission. Only a stupid Realtor would go for that.
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Old 06-13-2014, 04:33 PM
Status: "Open for work" (set 9 days ago)
 
Location: Just south of Denver since 1989
11,822 posts, read 34,355,412 times
Reputation: 8950
Default True

From the Contract to Buy & Sell

29. GOOD FAITH. Buyer and Seller acknowledge that each party has an obligation to act in good faith including, but not limited to, exercising the rights and obligations set forth in the provisions of Financing Conditions and Obligations (§ 5), Title Insurance, Record Title and Off-Record Title (§ 8), Current Survey Review (§ 9) and Property Disclosure, Inspection, Indemnity, Insurability, Due Diligence, Buyer Disclosure and Source of Water (§ 10).
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