We’ve been talking about problem solving. Some transactions just skate right through because you’re working with the right people, and they understand it, and the house is in great condition, and the financing comes easily. But let’s say it didn’t all align in that way.
Bob Nelson, Eugene real estate investment broker
Marcia Edwards, Eugene residential real estate broker
Marcia Edwards: Let’s say the condition of the property is not what you expected as a buyer when you started into the transaction, negotiated the price. Now you’ve discovered, for example, you need a new roof.
Bob Nelson: And now let’s take it from the seller’s standpoint. Buyer, you’re probably going to come to the seller and say, “Hey, I want a brand new roof,” and the seller’s probably going to turn to you and say, “Did you think that was brand new roof when you made the offer, when you offered us an as-is situation?” So most likely the negotiation, a fair negotiation is going to end up with maybe the buyer paying for half, the seller paying for half. And I say paying for. There may be a credit at closing, which effectively would push the cost down the middle and have them split it at time of closing. Now the buyer ends up with a brand… house with a brand new roof, but they’ve paid a little bit more to get to that, but most likely only about half.
Marcia Edwards: So let’s talk about how you get there. What happens is, you’ve got to make sure you’ve done your homework as a buyer if you’re going to approach a seller with that proposal, or a proposal regarding the roof. I’d usually as a buyer’s agent start by saying, “I think the roof needs to be replaced. I think you need to replace it, seller.” The buyer would write this in a proposal and response to the inspection and say, “Hey, I’m going to have to walk from this transaction unless we have this conversation.” And start the conversation with the seller.
Bob Nelson: Okay. Now you would have that happen in the offer itself? You would write it accordingly?
Marcia Edwards: This is after the due diligence. You’re already pending sale. You don’t have other buyers coming in to put offers in on the house right now, so it’s just a conversation between you and the seller.
Bob Nelson: Okay, okay. How would you deal with it if the seller simply stonewalled you and simply said, “Forget it. I’m not doing anything.”
Marcia Edwards: Well your buyers and you probably have a conversation as a buyer’s agent and you really know what their thresholds are, what they’re willing to do. Bob said, he skipped to the end of the conversation and said, “Likely you’re going to split it. Would you still take this house if you paid $5,000 more and get a brand new roof?” So, if you’ve had that conversation with your buyers, you know how it may land, but you’ve got to start by whatever’s-
Bob Nelson: Right, and you know that if it does land there that you’ve got an acceptable situation from your client’s standpoint, and you may trade to do better than that, but the issue is you know where, quote, unquote, fair would be.
Marcia Edwards: That’s right. The reasonable test is what I call it. Make sure you’re willing to do what any reasonable buyer would at the price that it would be reasonable as well.
Join Eugene, Oregon, real estate experts: Bob Nelson, Real Estate Investment Broker with Pacwest Real Estate Investments, and Marcia Edwards, Residential Real Estate Broker with Windermere Real Estate, daily at 5:30 on KPNW for the “Real Estate Today” radio show.