Posted by: jimlyons | June 1, 2012

Inspection for Perfection or Concession??


The real estate selling season is well under way with home sellers and buyers both trying to maximize what they get for the price of the home. Sellers try to minimize costs while buyers still try to extract everything they can from sellers in the way of price and concessions. Unfortunately for buyers, unprecedented low inventory levels, pent up demand and a surplus of buyers have squarely put the seller back in the driver’s seat when it comes to the negotiating process. The days of multiple full price offers, low or no days on market and certain contingencies being waived are back with a vengeance! All to the seller’s long awaited delight!

Buyers are discovering, to their dismay that homes they wanted to see or possibly buy have already been snatched up before they even get a chance to see or make an offer on the property. This area’s unprecedented low inventory levels-22314 inventory levels down 35% over last year and all combined zip codes in Alexandria down 28.3% to last year based on MLS housing numbers for the month of April 2012-are slowly driving up home prices and making sellers reluctant to cede little if any concessions to buyers. Realtors are warning (or should in some cases) buyers to be prepared to act that day if they are interested in a property.

Now that the negotiating pendulum has swung back to the seller’s favor-what’s a buyer to do? Some buyers may think that using the Home Inspection as a bargaining tool is a way of wresting some semblance of control back from the seller. Make sure you, as the buyer are utilizing this important contractual tool for it’s intended use. Home inspections are an important part of the selling and buying process for several reasons. It insures the home is in good structural and functional working order, provides for the repair of items that impact the home and is an avenue for both parties to void the contract based on compliance issues or non agreement of repair items.

It is not a tool intended as a bargaining chip to reduce selling price or negotiating concessions but to properly address the safety, security, foundational and financial issues that arise during any normal inspection. If reduced sales price or repair costs are a part of the negotiated outcome, fine but the buyer should not expect to “make money” on this part of the transaction.

Frivolous repair requests by the buyer (hoping for concessions) or recalcitrant sellers unwilling to repair legitimate items can send the deal into the proverbial trash can of failed contracts. Instead both parties should be negotiating this element of the buying process faithfully for a mutually acceptable outcome. Some buyers may not be aware that the seller can refuse any and all repairs requested by the buyer. Be aware that your lender may also require certain repairs as part of the funding process.

In order to prevent some home inspection surprises, buyers and their agents should take some steps while touring homes of interest. Rugs, pictures or furniture that looks out of place should be moved (only if possible) and examined for stains or damage. Sellers may sometimes try to hide a defect by covering it up with one of these items. When viewing the home, look at the condition of the water heater, furnace, A/C etc to get a better idea of any repairs that might be obvious or of concern. Check for cracks or stains in the foundation (when visible), walls and doorways for excessive “settling” or potential water leaks in the home. These simple steps, along with other tips your agent might provide can help prevent contentious repair requests later on.

After all, part of moving into a new home is the confidence you have that the right steps have been taken for you to thoroughly enjoy your new home!

The Selling Edge is a program specifically developed to help home sellers navigate the selling process and maximize the financial outcome when selling their home. For other helpful tips and articles, please visit us at http://mysellingedge.wordpress.com/

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