Is A Request For Repairs a Counter-Offer???

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Real Estate Agent with Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate 303829;0225082372

When did a request for repairs under a Home Inspection Contingency become a Counter-Offer???  Or, did it???

Pam Crawford writes:

"What most buyers who are purchasing a home do not understand is that once you ask the seller to do something as a result of the home inspection, you are renegotiating the binding contract, and the seller could decide not  to sell anymore."  See:  http://activerain.com/blogsview/3388247/buyers-a-home-inspection-is-not-to-re-negotiate-the-deal-


That's a unique interpretation of the Home Inspection Contingency which has already been negotiated in the Contract of Sale.

There is "As Is" and there is "As Is".  Seems to me that, if the seller had no interest in a Home Inspection Contingency as a part of the Contract of Sale, they would have sold the property as banks do when selling a REO with the Home Inspection for the buyer's information purposes only and the understanding that the seller will MAKE NO REPAIRS. 

Unless the seller sells the home with this inspection contingency, any repairs requested by the buyer are pursuant to a Contract of Sale with a Home Inspection Contingency that has already been negotiated and accepted by the seller.

NOT A COUNTER-OFFER.  I do not believe that a Home Inspection Report requesting repairs is a Counter-Offer.  The seller accepted the Home Inspection Contingency as a part of the Contract of Sale.  The contract has already been negotiated and is not being re-negotiated.

What is generally not acceptable under a Home Inspection Contingency is when the buyer tries to renegotiate the price of the home based on the home inspection report.

We All Get That.

 

Home Inspection

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Re-Blogged 1 time:

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  1. Winston Heverly 12/14/2012 01:28 PM
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Real Estate Sales and Marketing
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home inspection report

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Rainmaker
633,406
Stephanie/Bob The Ruiz/Miller Team
Keller Williams Cornerstone Realty - Ocala, FL
The Ocala Dream Team

Hi Lenn, we saw Pam's post and it was right on the mark!

July 27, 2012 11:47 AM #51
Rainmaker
1,049,440
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Lenn love the spirited comments! here in California although we have "as is" in the Purchase Agreement/Escrow Instruction, the reality is it is an opportunity for both parties to revisit the True Value of the Property. Buyers make decisions  on what purchase price they are willing to buy a property based on a number of variables that are known such as : 1. comparable, 2.type of market (fast,slow, buyer's or seller's)  and 3. then what they think is a reasonable condition of the home. After the inspection "they discover" what we call "unknown or unexpected defects" at that point it becomes decision time: 1. buy as is or 2. walk away from the sale....hence savvy buyers,sellers and Realtors do not want option 2 since there might be a middle ground where everyone walks away with a "win-win" scenario. So to answer your post "per se" it is not a Counter Offer but it is sure a critical junction in the Transaction.

July 27, 2012 12:02 PM #52
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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Dana.  That is my understanding too.

Evelyn.  That makes sense.

Tni.  Few sellers do pre-listing inspections.  A defect doesn't exist unless or untill a buyer discovers it.

Alan.  Geez.  Thanks a lot.

Tammie.  But all within the existing contract.

Lyn.  The consensus is that a request for repairs under a home inspection contingency do not constitute a counter offer.  That would indicate that there was never a ratified contract.

Bob.  I disagree.

July 27, 2012 12:08 PM #53
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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
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Endre.  The key in my opinion is that the inspections, negotiations subsequent to the contract agreement are all within the existing contract and not a counter-offer.

July 27, 2012 12:11 PM #54
Rainmaker
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Leslie Ebersole
Baird&Warner Fox Valley - Saint Charles, IL
REALTOR - Chicagonulls Western Suburbs

Based on what Alan (Cook County) and Lyn Sims (DuPage County) wrote, I just clarified with a Kane County attorney what I believe to be true. 

The first five days is called attorney review and the first 10 days are for home inspection and final contract acceptance. During attorney review either side can cancel the contract for any reason. For example, a seller could cancel the contract if the buyer asks for an extension to get the inspection(s) done. Then, if the buyer asks for "anything" during the home inspection time - a repair, an extension, a glass of water -- that wasn't in the initial contract then the seller can say no and cancel the contract. Seems like we all agree up to that point. But what's interesting is the interpretation of whether the home inspection is a renegotiation with offers and counter-offers. None of the attorneys in my area use the phrase "this is not a counter-offer" in their buyer repair-request letter.

Lyn is about 20 miles from me and Alan is about 45. So it's not even just the state law, it's local practice. 

July 27, 2012 12:47 PM #55
Rainer
33,281
Karen Ferro
Re/Max Advantage Real Estate, Marblehead Ma - Swampscott, MA

I am not sure what Pam's post was trying to reveal except that a "re"negotiation after a home inspection can cause you to lose out....Which is true for both parties. Asking for major items to be repaired isn't necessarily a renegotiation tactic, some items may be a deal breaker for the buyer and some may be items that were unexpected when making the initial offer.  I am in MA and thought as you do, that the buyer is the one with the option to back out during the inspection period if the seller doesn't want to make any repairs, etc. We do have two contracts. The initial "contract to purchase" (many call it the offer) and then, typically after a 10 day home inspection period, the P&S is entered into in which the attorney's can review and amend.

July 27, 2012 01:06 PM #56
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Alan May
Coldwell Banker Residential - Evanston, IL
Evanston & Northshore of Chicago real estate

@ Leslie (#55) yep, very regional... it's all dependent, not on the law, but on the interpretation of that law by local District Courts.  And clearly DuPage, Kane and Cook aren't in lockstep.

July 27, 2012 01:37 PM #57
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Karen Fiddler, Broker/Realtor
HOM Sotheby's Intl Realty, 949-510-2395 - Laguna Beach, CA
Laguna Beach & Lake Arrowhead, CA (949)510-2395

In California all properties are assumed to be "as-is". Of course there are requests made anyway....but it's a contingency for the buyer, not a counter offer to the seller. Sometimes things do escalate into a deal breaker, but I always find it annoying when a buyer asks for a large discount from my seller for something they could clearly see before they write the offer.....such as a cracked driveway.

July 27, 2012 02:10 PM #58
Rainmaker
181,593
Jim Paulson
Progressive Realty (Boise Idaho) www.Progressive-Realty.info - Boise, ID
Owner,Broker

I must agree that my interpretation is spot on with your Lenn.  It is important to know when you accept an offer (or have yours accepted) what the intent of the home inspection is.  I tell people it is like buying a used car, the seller priced it for the condition is in and you can't expect them to rotate the tires, change the oil, fix the rock chip in the window and replace the burned out tail light at the price they offered it at.  However, if you test drive it to the mechanic to learn it has a transmission issue or that the is more than meets the eye, maybe there is a case to renegotiate or walk away.

July 27, 2012 05:55 PM #60
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Bob Crane
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Well Lenn, it may not be renegotiating the offer, but if it is not then the original offer was a poor offer with a grey area (the inspectors report) that is large enough to drive a truck through.

July 27, 2012 06:20 PM #61
Rainmaker
59,789
Sharon Sanchez
Ace Home Realty - Carson, CA
Your Number "1" Source For Real Estate.

Hi Lenn.  In California the Home Inpsection is a contingency, not a counter offer.  However at times, some agents try to renegotiated the agreed upon salesprice based on the outcome of the home inspection. It's  not right, but they try and sometimes get away with it.

July 27, 2012 08:55 PM #62
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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Leslie.  In states like MD and VA, there is NO attorney review.  The contract is negotiated, signed and then the home inspection contingency is in effect during which repairs are negotiated WITHIN THE EXISTING CONTRACT.  Requests for repairs are not counter-offers.

Karen.  The rules and regs of different states are amazingly different.

Alan.  It appears that no two states are in lockstep.

Karen.  I agree completely.  It is "as is" or "as you saw it when you decided that you wanted to buy it".

Jim.  Renegotiate?  Or, negotiate within the existing contract for repairs???

Bob.  Not likely with our pre-printed contracts.

Sharon.  Same here and my understanding too.

July 28, 2012 03:27 AM #63
Rainmaker
811,516
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
your real estate writer

It's been several years now since I let my license go, so this may have changed... In Idaho the section of the purchase and sale regarding inspection and repairs had a space to fill in the amount the seller would agree to pay for any such repairs. If the need exceeded that amount, it was back to negotiations.

July 29, 2012 12:44 AM #64
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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
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Marte.  Sure, but still under the existing Contract of Sale, not a new transaction.

July 29, 2012 03:24 AM #65
Rainmaker
589,571
Jim Hale
ACTIONAGENTS.NET - Eugene, OR
On the Move for You! - Eugene - Springfield Oregon Real Estate

If the sales agreement contains an inspection clause that provides the buyer an easy out over reported, needed repairs (as all in my state do), then the only thing that has been negotiated up front - in effect - is a contract for a contract.

Both agents should be making this reality perfectly clear to their respective clients at the time the original agreement is being negotiated.

July 31, 2012 01:16 AM #66
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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
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Jim.  I'm not sure I understand your "contract for a contract". 

The contract containing the home inspection contingency is a fully enforceable legal contract, the earnest money has been deposited and it is a CONTRACT. 

It's the CONTRACT CONGINGENCY that permits the buyer to void the CONTRACT.  Not void the "contract for a contract".

 

July 31, 2012 03:30 AM #67
Rainer
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Nan Jester
Exit Real Estate Gallery Jacksonville Beach, FL - Jacksonville Beach, FL
Realtor, Exit Real Estate Gallery

You have a better understanding of the process.  My contracts here in FL specifically state there is a home inspection contingency.  We have an "AS-IS" contract for the situation where you can inspect all you want but it will not change the contract.

August 03, 2012 10:54 AM #68
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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
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Nan.  Agreed.  Same here.

August 03, 2012 11:40 AM #69
Rainmaker
1,267,827
Carla Muss-Jacobs, Principal Broker/Owner
BuyersAgentPortland.com | (503) 810-7192 Portland Metro Exclusive Buyers Agent | 100% Buyer Representation ~ 100% o... - Portland, OR
Buyer Focused ~ Buyer Results

Your post was re-blogged and it's still timely as when written in July.  The Sales Agreement (contracts) used in my area outline that repairs can be negotiatied, or not.  Buyers can revoke their offer if said repair negotiations can't come to terms.  But they have a window within the inspection contingency.  I've only met one listing agent in my market that thought it was a re-negotiation of the offer. It's not, according to the language. 

December 14, 2012 01:35 PM #70
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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
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Carla.  I wouldn't consider it a counter either.

Price, terms and conditions are not a part of the Contract of Sale, but are within the home inspection contingency which is a part of the contract.

December 14, 2012 02:19 PM #71
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