So you’ve found the house of your dreams, made an offer, and finally, both you and the seller have agreed on a price. This is when your agent has you sign the sales contract, and you pop the bubbly, right? Perhaps you shouldn’t pop that cork so fast. You may have more negotiating to do.
Unless you are buying a new construction home where most buyers opt out of doing an inspection, you are only at the beginning of the negotiating process, because negotiations still occur during the escrow period — mostly notably over what is revealed during a home inspection. Zillow’s Brendon DeSimone offers these tips for this step along your home purchase journey:
Don’t expect the seller to get the work done for you, even if they agree to pay for it. Instead, ask for a credit for the work to be done. Why? Because the seller’s focus is on moving out. “If the property is moving toward closing, they’re likely packing and dreaming of their life post-sale. The last thing they want to do is repair work on their old home. They may not approach the work with the same conscientiousness that you, as the new owner, would. They may not even treat the work as a high priority,” says DeSimone.
Even if you got a quote from a contractor or tow for the repairs, taking a cash-back credit at close of escrow means you can even use the money to complete the project yourself (if it’s simple enough) and pocket the difference.
If you got inspired watching a slew of HGTV shows and are already planning to remodel a bathroom the minute escrow closes, then it’s unlikely that you would care about a bit of floor damage, a leaky faucet, or that the tiles need caulking because they’ll get taken care of during your renovation. But the repairs are still up for negotiation and asking the seller for a credit to fix these issues will help offset some of your closing costs.
Don’t share your plans with the seller or the seller’s agent. “Revealing your comfort level with the home or your intentions, in the presence of the listing agent, could come back to haunt you in further discussions or negotiations,” says DeSmone. “If they sense you are uneasy with the inspection, they’ll be more willing to relay that to the seller. Conversely, if you spend two hours measuring the spaces and picking paint colors, you lose negotiation power.”
This is especially important if you mention gutting the kitchen, according to DeSimone. “If you mention you’re planning a gut renovation of the kitchen, the sellers will certainly hear about it. And they’re going to be less likely to offer you a credit back to repair some of the kitchen cabinets.” It’s wise to resist the urge to share your giddiness regarding plans for the house.
He warns buyers about completing the original contract assuming with the expectation that they can and will negotiate the price down more after the inspection, as it may backfire on you — particularly in a competitive seller’s market where sellers tend to call all the shots.
DeSimone ends his cautionary advice with, “A real estate transaction is never a done deal until the money changes hands and the deed is transferred. Stay on your toes. Otherwise, you may risk losing out on further viable negotiation opportunities, which could lead to buyer’s remorse.”
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