Reduce Sale Price After Inspection?

[Real Estate Administrator]

For the most part, buyers make offers on homes with the assumption that they are in good repair. While buyers sometimes have an opportunity to review a seller's disclosure statement, they often do not get to see the seller's disclosure until after the property is under contract. Even when a buyer gets to see a seller's disclosure, seller's rarely seem to provide any detail about items that are in disrepair in their home. So most buyers enter into a contract assuming that they are paying for a home in good repair. Buyers agree on a price that assumes most home appliances, fixtures, and overall structure are in good working condition/order. When a buyer has an inspector conduct an inspection and when the buyer learns about items that are not functional or that need repair, a price adjustment is typically requested or the buyer requests that the seller fix the issue. Buyers often prefer to get a reduction in price for the repair because they want to control the repair, ensuring that it is done correctly. At times a buyer will get a price reduction and decide not to repair the issue, which is another reason why a buyer might prefer a price reduction. In summary, a buyer most often submits an offer that is based upon purchasing a home in good repair. If you are a seller, don't be surprised when you get a contract on your house and a buyer begins to negotiate down the price following the inspection. Your position of leverage and the market will be the deciding factor of whether the seller will have to lower the price or pay for repairs.

[Lucien]

I am sure contracts vary significantly from state to state but here is how we handle inspection issues here in north east Florida. When a buyer submits an offer to purchase a home they have an opportunity to specify a dollar amount in the contract to cover the cost of repairing discrepancies identified in the home inspection. The work must be done by appropriately licensed contractors and the work must be paid for before closing or from the proceeds of the sale at closing. If the cost of repairs exceeds the amount allocated then there are several options.

1. The seller can pay the excess cost needed to complete the repairs.
2. If the seller declines to pay the excess cost the buyer may cancel the contract.
3. The buyer may pay the excess cost and proceed to closing.
4. If neither the buyer or seller is willing or able to pay the excess and the lender is willing to make the loan in spite of the needed repairs then the buyer and seller may renegotiate the price to factor in the repair cost.

In most cases the seller will simply make the repairs and get the home sold. It is far less complicated and gets the deal closed on schedule.

For more seller and buyer tips visit Jacksonville Florida real Estate and click on Buyer/Seller Tips

[Real Estate Administrator]

Lucian, this is generally the case with Austin Texas real estate contracts as well. It just so happens that most inspection reports seem to have very few items of needed repair written on them. Few inspection reports have fewer than 30 items outlined needing repair, even for newly constructed homes. Code issues are common for both new construction and resales. Other minor issues are common such as loose hardware and broken fixtures. Buyers and Sellers should expect that an inspector will find a long list of items needing repair on just about every home that gets an inspection. The problems occur when large ticket items are found in disrepair such as water heaters, air conditioners and central heating, structural issues with the foundation or pool, and roof issues to name a few. Another common deal killer is termite or water damage issues. But the level of concern regarding any particular issue is dependent upon the buyer. Some buyers fully expect to find a multitude of issues while others want the home perfect. This is where the largest gap exists in missed expectations when a home is placed under contract and this is why it is important for Sellers to make note of issues on the Seller's disclosure. Seller's need to be sure that the Seller's disclosure is given to a prospective buyer BEFORE it goes under contract so the buyer can factor the needed repairs into their purchase price. But even if the buyer sees the disclosure they may still offer a price that does not include a reductino for the repair. In conclusion, Seller's be sure that you (or your Realtor) communicate clearly with a prospective buyers about the needed repairs and the associated cost before they submit an offer if at all possible. This can save you from thinking you have a deal and then having the Buyers try to renegotiate a substantial price reduction after the inspection.

[Real Estate Administrator]

Thanks for the words of encouragement Charles. There are a lot of people hurting financially right now and many scared about what is in store for the US economy. This is a good time to reflect on our creator and consider his purpose for our lives.

[Royal Daniel]

If the inspection uncovered something which the buyer did not know about, then they could try to negotiate to have the condition repaired or to have a price reduction as a result. However, note that the buyer could not back out of the transaction because of minor problems, only a real serious issue could release them from the purchase contract (I would need more info on what is at issue in your case to address it directly).

[khelzy09]

this is very informative
thanks..

Originally Posted by Royal Daniel

If the inspection uncovered something which the buyer did not know about, then they could try to negotiate to have the condition repaired or to have a price reduction as a result. However, note that the buyer could not back out of the transaction because of minor problems, only a real serious issue could release them from the purchase contract (I would need more info on what is at issue in your case to address it directly).

i agree of what you said..

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as soon as you obtained the inspections report, you should determine the problems that the seller should repair and the features that you are likely to accpet as is. however, after home inspection, negotiation comes in. final negotiations often occur following the scheduled inspection. this involves asking the seller to make more or fewer repairs and asking the seller to lessen the sales price. Usually, there are things that you should know about negotiating and finally deciding on a deal. You need to be careful and conscious of the deals being made. If the existing transaction puts you off, say so. You should also note about the loan and any existing mortgage that you parley with your bank.

[tigulecorn]

At first thought it almost seems redundant and costly to have two home inspections on the same property. A seller more than likely is in the same process of purchasing another home and will not want to incur the cost of two home inspections, one for the home they are buying and the one they are trying to sell.

[Norman62]

You have a middle age home? and you wants to sell it?
Don't worry , at first find your home outlook gorgeous by coloring it.
Then interior.

[realcrusher]

Real estate industry has never been down, infact people are now looking for new houses because its cheaper unlike the last few years.

[fink1434]

Hi everyone.
I am new in the Torrance city and need a good home. Could anyone suggest me some website that provide me reliable and affordable equity inspection?

Torrance Certified Home Inspector