One of my clients was helping his mom sell her home as she was in a nursing home. The house had been in the family for over 40 years and hadn’t been updated for over 30 years. The house was vacant and in need of repair, but they wanted to sell it as is.
The sellers priced the house aggressively as it was the largest home in the area and they wanted to get top dollar. They turned down two offers, then started a series of price reductions. Eventually they accepted an offer that was lower than the two they turned down.
All the buyers that made offers deducted their estimate for the cost of repairs from the list price when they made their offer; as the list price dropped, so did the offer price.
When the seller accepted the low offer, it was under the condition that the house was being sold “as is” and there would be no repairs made by the seller. The buyers and seller agreed that the buyers could have an inspection to ensure they wanted to move forward, and they could cancel the purchase agreement if there were new found concerns.
After the inspection the buyers had a long list of repairs that they asked the seller to take care of prior to closing or they wanted a $20,000 reduction. The seller thought that was an unreasonable request and at first wanted to cancel the purchase agreement, but after sleeping on it, he agreed to make the repairs as he felt he could get the work done for $5,000.
The seller had the work completed and when the buyers did their walk through, they weren’t satisfied. They asked for more work to be done or they wanted a $5,000 price reduction.
The seller was furious, and said no. The house appraised for more than the sale price, and with the work completed, we knew we could sell it for more. This was conveyed to buyer and ultimately, they decided to move forward and accept the house as it was.
My recommendation is almost always to offer a credit in lieu of repairs to avoid this situation. In this case the buyer and seller were $15,000 apart with their estimates, and the seller made the decision to do the work. In hindsight, the seller said it wasn’t worth the time, effort, and stress of trying to make the buyer happy. The sellers were grateful that the sale stayed together and closed.
Closing a home can be an emotional roller coaster for buyers and sellers. It is important to work with an experienced agent to ensure a successful closing, even when problems arise.
Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to firstname.lastname@example.org. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.