The Top Ten Reasons It’s a Great Time To Buy Real Estate!
Read this article by a REALTOR in Arizona on his top 10 reasons why it’s a great time to buy real estate.
I’d like to comment on Reason #7:
“Repair requests are welcomed. After a buyer completes a home inspection, they are allowed to submit a repair request to the seller. In the past a seller might insist the home was sold ‘as is’. Many times, there were back-up buyers waiting for a primary buyer to upset the seller whose home was increasing in value almost daily. “
While I don’t know if the correct word is “welcomed”, I do agree that a Buyer coming back with a list of repairs has to be considered by the home seller these days.
This part of the process never made too much sense to me, even during a Sellers market…
A Homeowner gets an offer from a Buyer and the negotiation begins. You go back and forth and get down to the Buyer offering $647,000 and the Seller wanting $649,000 until finally one gives and you agree on “the price” (some negotiations come down to a few hundred dollars between the two and no one wants to budge). Then, the Buyer gets a home inspection (from an inspector the Buyer chooses) and then the Seller gets a Request for Repairs and negotiations begin again! These days, why wouldn’t the Buyer put every little item found by the Home Inspector on the Request for Repairs list? Even the little things can add up, plus the time it will take the Homeowner to get the people to come out to fix a plumbing item (or items), an electrical one, etc. when the escrow clock is ticking with little time to get estimates. Plus, if a major item is found during the inspection, the repairs may be 5, 10, 15 thousands of dollars or more. Would the homeowner have agreed on the original price of the home first negotiated if they knew there was $15,000 worth of repairs needed??
What option does the Homeowner have in this market? They can say they won’t pay for a portion of the repairs and risk the Buyer canceling the agreement which they can do anytime during the Inspection period. Then the homeowner gets a “Back on Market” tag next to their property in the MLS which makes agents wonder what is wrong with the house. When the next offer comes in, the homeowner MUST disclose everything found by the old Buyer’s home inspector to the new potential Buyer.
Wouldn’t it make more sense for the Homeowner to pay for the pest inspection AND a home inspection BEFORE the property goes on the market?? Then, you know exactly what the product is that you are selling. You may price it differently by knowing this info. Or, you may want to fix some of the items before you list the home. At least you know what you have when you enter into the initial price negotiation and won’t be SURPRISED when the Buyer does the home inspection. You also keep it down to a SINGLE negotiation. If the home inspection comes back fairly clean, that’s also a powerful tool for the Listing Agent to use when negotiating the price with the Buyer!
If the Buyer decides to have their own home inspection and find some discrepancies between the reports, it’s the home inspectors that will need to work this out. If you use a good one, they can argue something that another one finds that really isn’t valid and something you probably would have paid to fix if you only had the one report from the Buyer’s inspector.
A pest inspection is something that the Seller usually pays for around here anyways. For the $60-$75 most cost, it will also tell you how much you’re going to need to spend to get a Section One clearance and what Section Two work is noted. A home inspection costs around $400. I know of a really good inspector on the Central Coast and would be happy to give you his name if you send me an email.
While the homeowner will have to pay around $400 for a home inspection, chances are you’ll going to make it back plus more by knowing the condition of your home during the price negotiation.