What? A Request For Repair?

By
Real Estate Agent with Trident Realty Group

Have you ever had a seller wonder what this was all about? Chances are if you're a Rainmaker you've coached your clients well, both buyers and sellers alike. On occasion my sellers are blindsided with some creative requests. Here's how I coach both buyers and sellers to prevent this from happening. Note: Buyers and sellers reading this, you might impress your agent, pay attention...

Understand the part of the contract where "as is" is mentioned. In California the purchase contract specifically states "the property is sold in its present physical condition". What this means is it comes with the faux wooden beams, wood paneling, 1957 mirrored Elvis tile and the garden-hose-green shag carpeting. This doesn't stop buyers from asking for everything under the sun (and carpet), however. But buyers should be aware the seller loved their home at one time and is selling for an agreed upon price. If priced right, sellers have objectively taken into consideration the condition, fit and finish of their home and programmed that into their price.

If repairs are requested, negotiate based upon the end goal - sale of the property. Buyers often ask for items to see what they can "get away with" or how much they can beat a seller down while giving up their most prized possession. Conversely, sellers often feel their house is perfect and "how dare anyone ask me to fix or change anything?". There can be deal breakers coming from either side; ask, negotiate and respond fairly. An offer was written in good faith that the buyer wants to own this home, right? The seller should take a deep breath when reading a request and consider the buyer's perspective.

What is fair game to ask for? As mentioned before, the buyer can ask for everything and anything, including removal of the moon and star collection on the mirrored ceiling. Here in CA, the seller literally does not have to respond. This in and of itself can be a deal breaker, kind of like me asking my wife Barbara if I can go on a week long motorcycle ride over Christmas with the fellas; she'd just stare at me like a statue of Abe Lincoln. Can a buyer ask for cosmetic repairs? Absolutely! In all my years of asking and answering requests for repairs, I've said the same thing, "the buyer can ask for anything but the seller really should give priority to health and safety related issues".

What are health and safety related issues? First and foremost, both sides should not take this lightly or too serious. A seller might have been living in a house for years in certain conditions that might have warranted building code updates in recent years or standards that needed changing. Does this mean the house is instantly uninhabitable? Absolutely not! Common sense prevails. Here are a few examples of (but not limited to) issues where remedies could be asked for: mold, fire hazards, leaks (water or gas), broken glass, roofs, foundations, lead based paint, asbestos and falling hazards (human or inanimate objects). Some of you 100k plus point clubbers could add to this I'm sure but you get the point. Again, there are many things a buyer could ask for, these just tend to be important and pertinent to a buyers definition of habitability.

How can a seller respond? Simple - no, yes or yes to some. "Not only no but heck no" can cause a buyer to take their ball and go home. If a buyer was coached properly, these could be items they feel will tremendously impact their living experience in their new (old) home. Ask wisely and consider the seller's reason for saying no - "Read paragraph 7A silly" (the as-is paragraph), "this is cosmetic", "I don't have the money to do it (short sale or foreclosure)", "the item was only recommended by your home inspector, not mandated by anyone", "I'm part mule", etc. Yes answers - self explanatory. Yes to some, also self explanatory, refer back to "no" for the items not agreed upon. Make sense?

What happens next? Actual repair paid for by seller often happens in CA, refer to your contract defaults for repair standards. Here's what I recommend as listing agent, it's a little easier with a happy ending for all. At the beginning of the transaction I prime the buyers agent to not only conduct a home inspection but to have licensed, reliable contractor(s) inspect and give the buyers an estimate for repairs they might want - all are part of buyer's due diligence. This will help the seller arrive at an easy response to a request for repairs. At this point the seller can do one of two things, agree to repairs during the transaction OR agree to NO repairs and give a credit to buyer at closing. Call it a discount on the house (or closing costs) that happens to be the price on the written estimate, and the buyer can fix these issues under their ownership. Everyone should be happy at this point, buyer got a break, seller can move out without fixing the house they are leaving behind. Note: Seller CANNOT give buyer cash in hand from proceeds of sale if financing is involved, this is mortgage fraud. However, there is such a thing as a Rehab loan; ask your favorite lender or a fellow Rainmaker for details.

Is there a better way? Quite possibly, each situation is different. This particular approach has served my clients well in Chula Vista and all over San Diego for several years and I haven't heard any complaints after closing. I would like to hear your thoughts and as always, I'm open to suggestion...

Marvin de la Vega

Disclaimer: Consult with your local agent, broker or real estate attorney for specific guidance in your locale. While meant to be an illustration of what can happen in CA, this is by no means the rule for all transactions. For further back pedaling and an all encompassing disclaimer, refer to my profile page. Md

 

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Re-Bloggged 5 times:

Re-Blogged By Re-Blogged At
  1. Gabe Sanders 04/07/2009 06:46 AM
  2. Yvette & Dennis Gardner 04/07/2009 08:17 AM
  3. Norma Brandsberg 04/07/2009 08:50 AM
  4. Sandy and Jay Souilliard 10/23/2009 03:43 PM
  5. Paul Gapski 08/05/2012 08:20 AM
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Topic:
ActiveRain Community
Location:
California San Diego County
Groups:
1st Time Buyers
Active Rain Newbies
CUSTOMER SERVICE
LATE NIGHT - EARLY MORNING AT ACTIVERAIN
Nothing but the Positive
Tags:
marvin de la vega
chula vista
san diego
foreclosure
short sale
buyers agent
repairs

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Rainmaker
53,851
Marvin de la Vega
Trident Realty Group

Sue - great thoughts nonetheless. This particular post has opened my eyes to how dedicated professionals think throughout the country. I honestly didn't bargain for the outpouring of experience and wisdom demonstrated here by my peers. Thanks for joining the group, you certainly have a good handle on how it's best handled in NC. 

April 08, 2009 12:34 AM
Rainmaker
196,974
Jim Mushinsky
Centsable Inspection

Marvin - I like that you keep the goal in mind - the sale of the property.   If you're not interested in the sale of the property then don't waste time with outrageous requests just to pretend that you are interested in the sale of the property.  Great posting.

April 08, 2009 12:51 AM
Rainmaker
53,851
Marvin de la Vega
Trident Realty Group

Jim - I have the same attitude toward senseless lowball offers, what's the point? If the seller agreed on purchase price and opened the transaction with a buyer, then good faith should exist all the way through. It's a small sandbox, everyone should play fair and work toward the same goal - building (selling) a castle...

Thanks for chiming in! Md

April 08, 2009 08:46 AM
Rainer
332,837
Paul Gapski
619-504-8999,#1 Resource SD Relo
Berkshire Hathaway / Prudential Ca Realty

Thank you for sharing your blog; we need Real estate Professionals to share their comments and information regarding their markets and experiences. Thanks again from beautiful Sunny San Diego

August 05, 2012 08:06 AM
Rainmaker
53,851
Marvin de la Vega
Trident Realty Group

You're quite welcome Paul. I think our RPA-CA has changed a little since I've penned this post but in reading it again, not much has changed in my approach to all this, especially now with the (good) change in tempo in our market. Have fun out there, hope to see you in a transaction soon. M

August 05, 2012 10:02 AM
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Rainmaker
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Marvin de la Vega

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