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Respected Contributor
Posts: 4,936
Registered: ‎07-02-2015

Re: Let the Games Begin

[ Edited ]

Real estate customs differ by location and contract terms are whatever the buyer and seller agree to.......but usually with clear contingencies spelled out in the accepted offer.  Some people have difficulty accepting the reality of these contingencies.

 

In the list of items that convey with the house are usually the furnace/AC system, major appliances, light fixtures, inground swimming pool,  etc etc. etc.  If an item is listed as conveying, it is required to be in "working order" at the time of settlement unless otherwise agreed to.

 

Home inspections can be done before an offer is made but  few buyers want to pay for one until a purchase price is determined.  Inspection  usually comes after the price is negotiated.  If the inspection turns up repair issues, the purchaser should ask that all work be done by qualified contractors (no Harry Homeowner attempts at electrical work, please) and receipts provided for the completed repairs.  The seller may opt to arrange for the repairs or, instead, offer to discount the agreed-upon price to compensate for the deficiencies.  However...........

 

Credits  for repairs given to the purchaser by the seller can be tricky issues when certain types of mortgage loans are involved and can be prohibited.  Repairs needed but not done to make the house habitable and  in working order (such as plumbing, electrical, roof) are also issues that can affect the appraisal and the buyer's ability to get loan approval.

 

Once the deal is finalized and the lender (if there is one) sends out an appraiser, the house must appraise for the value of the contract price. If it doesn't, either the purchaser must come up with extra down payment money (or cancel the deal altogether), or the seller must reduce the price or tell the purchaser that the deal is off.

 

These things are routine, because contracts contain contingency clauses--for a satisfactory inspection, a satisfactory  radon test and/or lead paint testing, a satisfactory pest inspection report, a satisfactory appraisal that allows the purchaser to obtain  financing.  The buyer has certain leeway and discretion to decide exactly what "satisfactory" means.

 

Not everyone finds it easy to accept the consequences of contract contingencies, but they are for the protection  of both parties in the end.

 

 

 

 

 

 

 

Respected Contributor
Posts: 4,936
Registered: ‎07-02-2015

Re: Let the Games Begin

[ Edited ]

About all those "nitpicky" things that the seller sees in the home inspection report.......those are not necessarily obligatory repairs. 

 

The inspection is not just to determine whether the house and items conveying are in working order.....it's also an informational document for the purchaser that helps the purchaser learn about the house and its systems.  When something that might need improvement or could be enhanced  is listed in the inspection  report, this  does not necessarily mean the seller has any duty to follow up on it.

 

What does matter is what makes the property acceptable to the lenders who will be putting up the money for the purchaser to buy it.  Without their participation, there will be no sale for the seller in many cases.