Thursday, September 24, 2009

Property inspections are a must. Even in hot markets or in foreclosure situations, buyers shouldn't skip inspections. Buyers should be scheduling them as soon as possible to avoid delaying the closing. It's in everyone's best interest to have all the property defects revealed and addressed before closing.

Get repair quotes. The next step is for buyers to obtain estimates, or quotes for the repair of major defects. Quotes should be specific as to what will be done, the materials that will be used, the cost, effective dates of the quote, and whether any warranties will be provided. Ask that all repair quotes and repairs themselves come from licensed contractors or subcontractors when state building code requires it. In most states, a home owner can make repairs on his own home.

Negotiate repair expenditures or credits. Once buyers have received and reviewed all repair quotes, they should prepare a request to the sellers for those repairs, or reductions of the sales price in lieu of repairs. Attach inspection reports and quotes to the request. Sometimes the seller may believe that a quote from a contractor is too high. In such cases, the seller may call in another contractor to quote on the identical repair. Any difference between the quotes can then be negotiated between the parties. Buyers should submit all repair requests in writing, sign and date them. Likewise, sellers should sign and date any counter to a repair request.

Credit of repairs or a reduced sales price is generally recommended rather than making repairs. There are several reasons for this. Sellers are busy packing for their own move and don’t have time to do repairs or to work with contractors. When sellers do the work themselves, they notoriously underestimate the time required to make repairs. Contractors may not be available to do the work in time for the closing, thus causing delays. And buyers are rarely satisfied with the quality of repairs done by sellers. Once buyers and sellers have reached a consensus on repairs, credits, and price reductions... the final terms of the agreement should be in writing.

No comments: