Today we’re going to discuss needed repairs in a transaction. Thanks for checking out the Real Estate Today Podcast.
I’m Bob Nelson, Real Estate Investment Broker with Pacwest Real Estate Investments. And, I’m Marcia Edwards, Residential Broker with Windermere Real Estate.
Marcia Edwards: We’ve been talking about due diligence and how we really want a buyer to understand what they’re purchasing and what they’re procuring because at the time of the purchase, really the die is cast for the time of sale. You’re going to deal with what’s there during your ownership or you’re going to sell it with that encumbrance on it, so understand the property. Let’s say you’ve taken a look in your timeframes. Contractually, you’ve had this window of time, and you discover things that, in your opinion, impact the value and you may not have written the offer at that price point if you had known that prior to your due diligence.
Bob Nelson: In some instances, it can only reasonably be cured in the mind of the buyer with a price adjustment, but an experienced broker understands that there’s more than just price involved in a transaction, and certainly there’s probably going to be some give or take or if the seller has something. They’ve got 10 offers and you happen to be number one and you attempt to make some kind of adjustment. They’re just going to say, “Okay, sonny, step aside … next,” and you have no one opportunity to make any form of adjustment. It’s kind of take it or leave it.
Marcia Edwards: Just this week I went pending sale on a listing I have in the Ferry Street Bridge area. They went and got their inspections quickly, which we appreciated, and then they asked for carpet replacement in the repair addendum. Well, they viewed the carpet at the time of the showing. They were aware of this and then the price should have been reflecting what they’re willing to do for the as-is condition. So, now we’ve got a backup offer and they’re in a bad spot. That’s not a good plan. It may alienate your seller.
Bob Nelson: Yep, and I’m not exactly sure how you deal with that other than to maybe say, “Okay, seller, you pay for it. I’ll pay you half,” or something along that … Restated, don’t place the entire burden upon the other side unless, of course, it is a defect where you simply state, “If this isn’t fixed or corrected, I’m out of here,” …and then you let the seller understand that and then let the seller decide if they want to lose the transaction or make some form of concession and keep it together and moving.
Marcia Edwards: I think that people turn quickly … at least in residential that’s my experience, is that people turn quickly from good faith to, not paranoia, but great concern of the validity of the other side at the point-
Bob Nelson: He’s tricking me.
Marcia Edwards: Yes, at the point of the repair request. You’ve got to be very respectful in both your presentation and your content that it’s a safety concern, a lender concern, or something you did not anticipate that would be a significant financial impact on you. I’m Marcia Edwards, Windermere Real Estate.
Bob Nelson: And I’m Bob Nelson, Real Estate Investment Broker with Pacwest Real Estate Investments.
Join Bob Nelson and Marcia Edwards Eugene, Oregon, real estate experts daily at 5:30 on KPNW for the “Real Estate Today ” radio show.