Whether you are buying or selling a property, you can get overly excited when an initial offered is tendered. Both sides are asking questions like is it too high, or too low? Will they counter, or will the offer upset them and will they walk away?
It is part psychology, part business, part competitiveness, and partly exciting. It may be stressful, but keep in mind that at least in Texas, the initial offer is just the first part of the process.
In Texas real estate buyers have two chances to negotiate when buying a property. The first would be when they place their initial offer. This offer is centered mainly on price and a closing date, but will probably include the property in question passing a home inspection.
So what happens when an offer is submitted, and all other terms like financing are resolved, but there are problems in the option period with the home inspection? There are two points of view of course.
On the seller’s side:
- In Texas homes should have specific problems disclosed by the seller in the Seller’s Disclosure. While it is possible to sell a home as-is, it is up to the seller to release known issues with the property. Sellers in Texas should understand that cooperation with a qualified buyer in resolving issues with repair negotiations are in his best interest.
- A seller should also understand that once a previous potential buyer has discovered problems not previously noted, the next potential buyer may make even more challenging demands of the seller.
- A seller should consider that unless a buyer is being totally unreasonable in his offer price and expectations, he should take a deep breath and consider what may be reasonable. A repair amendment may in fact be reasonable.
On the buyer’s side:
- Consider if the defects that have been discovered have changed the real value of the home. If it is a roof, HVAC failure or a foundation issue, it certainly has. You then have every right to move on, or request a change in the offer price. Just make sure you are making reasonable repair requests.
- Don’t let anybody tell you the home improvement warranty will cover that. If something is not working at closing. A home warranty will most likely not cover it.
- Issues found in an inspection can certainly leave you a way out of the contract if that is what you want. If however, you made an offer in good faith and home inspections issues are relatively minor, don’t give up on your dream. Try to make it work.
Both sides should consider this:
A home inspection needs to be put in perspective. A Potential buyer has invested several hundred dollars in getting a home inspected. They would not spend that money if they truly didn’t want the house. Repair concessions should not be looked upon as a defeat by either party.
Each side also needs to remember that $500 or even $1000 for carpeting, paint, or electrical sockets is generally a very small percentage of the overall deal. Sometimes a buyer will ask for a $500 concession just to get their inspection fee back. It’s okay. Don’t over-react.
Again, buying and selling a home is part psychology, part business, part competitiveness, and partly exciting. Don’t let one of these pieces keep you from getting an otherwise reasonable deal done.
Remember, we are here to help buyers and sellers. Consider us your real estate source in Texas.
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