How To Rock Your Request For Repairs

A typical Residential Purchase Agreement contains an inspection contingency that allows for the buyer to inspect the property, review the reports and present a request for repairs to the seller. If the buyer is unsatisfied with the agreed upon repair list he or she can choose to cancel the deal and have their deposit returned. A request for repairs may ask for a detailed list of work to be done and/or a credit amount to cover the cost of the repairs.

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While some buyers feel that opting to waive the inspection contingency will give them a better at getting their offer accepted, we always advise buyers to opt to have the property inspected. While general home inspections cost several hundred dollars and are paid by the buyer, they could save the buyer a large amount of money in the long run. It also helps to educate you on the overall condition of your home and the condition of its systems.

Your home inspection will inevitably point out some problems with the property – no matter if it is brand new or 25 years old. Your home inspector will check that the main appliances and main systems (plumbing, heating, electrical, etc) are safe and operational. They will also check to see if there are any health and safety issues that might be a problem with the specific property. Pending the results, the general inspector will recommend additional inspections from a specialist (such as a roofing or foundation expert) and/or a list of necessary repairs. Most home inspectors have years of experience and should be able to identify what is problematic and needs to be addressed immediately, as well as what will need maintenance in the near future.

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At this point, you will need to generate a list of requested repairs or credits to present to the seller. This part of the escrow process requires negotiation and strong communication between both the agents and their respective parties. Thus, when deciding what issues or problems to put on your list it is helpful to consider how the seller might react – while you may feel that you are entitled to put everything the inspector recommends replacing, this is a key example of “picking your battles”. You may an extensive list, but it is best to get the list down to the most crucial items and be willing to let the minor things go.

Generally, it is a good idea to stick to health and safety items, as well as any damage that could adversely affect the structural integrity of the home over time. A few items of real concern are: cracks in the chimney, foundation cracks or a damaged roof.

As a buyer, you should be absolutely be persistent on ensuring that your future home is up to par, but you should prepared to take on some of the responsibility of the repairs. After all, you do not want to the deal to fall apart or get drawn out because you cannot come to an agreement as to which party will fix a few cracked floor tiles.

The best way to ensure that you get the most from the seller is to present estimates of the actual cost from contractors. While this may require more effort on your end, doing this gives the seller concrete proof of the price work that needs to be done and gives them little wiggle room.

Another thing to keep in mind when crafting your request list is the sale price of the home. If you were able to secure the home way below asking price, you should consider being a bit more lenient on your list. If you paid full price, you will have more wiggle room to include more requests, but remember that it is very rare to have the seller agree to all the requests right off the bat.

Most importantly, lean heavily on your agent during this whole experience! Remember, we are negotiation specialists and have gone through this process many times. We know the importance of being flexible, but also when to stick to our guns and fight for our clients and their wants. In the end, our job is to ensure that you get the best deal and that you feel 100% confident moving forward with closing on your new home!

Rent-Back Agreements and How They Work

One qualm that often holds homeowners back from selling their current property and moving into their dream home is that they will sell their home before securing a new one. Considering Southern California’s hot real estate market and how quickly homes are being sold, we recognize that this is a valid concern.  Buying a home is a huge decision.. and not one that anyone wants to make under the pressure of becoming homeless!

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However, several options exist to help ensure a smooth transition period  for both buyers and sellers. One alternative that we have found to be mutually beneficial for both parties is the rent-back agreement – this essentially allows the sellers extended time in the home by making them the new owner’s tenants after escrow closes. While this agreement comes with a time limit designated by the buyer, it gives the seller extra time to get things squared away with their new home. It also eliminates the need to deal with storing their belongings or finding an interim place to live! For the seller, this is a more secure option then simply extending escrow as it removes the risk that the escrow will not close and it also gives him/her access to the money from the sale.

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The rent-back agreement is advantageous to the buyer for two main reasons:

  1. If there are several competitive offers on the home, it may make the buyer’s offer stand out and help ensure it’s acceptance.
  2. The rent charged to the seller may help to recover closing costs – or at least lower the overall cost of the move.

Note: While it is technically up to the buyer to determine how much the cost of rent should be, it is typically the equivalent of the buyers’ principal, interest, taxes and insurance on a prorated basis. Thus, the seller will essentially be paying the buyer’s mortgage for the amount of time they will be occupying the home.

It is important to note that rent-back agreements are legally binding agreements made in writing so it is essential to maintain clear communication concerning your needs (whether you are the buyer or the seller!). Be sure to agree on the exact date that the seller is expected to move out, as well as the amount of rent the seller will pay.

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Overall, the rent-back agreement offers the seller some breathing room and peace of mind when it comes to finding a replacement home, but also proves beneficial for the seller. As long as the kinks are worked out and both parties are willing to participate, this option is an ideal solution for those who are looking to relocate into their dream home!

 

 

 

 

I Am A Certified Negotiation Expert!

The National Association of Realtors profile of home buyers and sellers shows:
-99% of Buyers believe negotiation skills are “Very Important” or “Somewhats Important” in their real estate agent.
-Only 43% of all Buyers felt their agent “negotiated better sales contact terms”.
-Buyers give “Negotiation Skill” the lowest satisfaction rating of all agent skills and qualities.
-Only 5% of Sellers want “help with negotiation and deal with Buyers”.

These statistics shock me and is pretty upsetting to me that so many home buyers and seller’s felt as though they were not represented by a skilled  negotiator. Over my years of practice in Real Estate I have learned how to communicate with my clients as well as the other agent involved in the transaction. I believe my form of negotiation is a collaborative one where it’s a win-win situation for all parties. Don’t get me wrong, my top priority is my client and getting the best deal for them while protecting and informing them, but I believe negotiation can be done in a way where we get what we want and the other party is happy and feels as though they get what they want.

To take my negotiation skills to the next level, I spent all of Monday and Tuesday earning this certification to better serve my clients and I’m feeling pretty good about it 🙂

Here are a few tips (whether you are in the Real Estate industry or not):
-90% of a negotiation is about gathering as much information as possible.
-Assess the situation, ask many questions, identify the type of negotiator you are dealing with, then apply the correct approach.
-The most successful negotiations are collaborative ones. When you approach a situation with a win-win outcome and all parties are happy you will have the best results.

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