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How Do You Negotiate Property Defects As A Buyer?

Pamela Narang
01/19/2004

Contrary to what some buyers believe, the results of a home inspection does not automatically become a repair list for the seller. With used homes, the primary purpose of an inspection is to provide information for buyers who may then submit repair requests to sellers. It is important to remember however that such requests are negotiable and not legally binding upon the sellers. When requests are made, they should be done with the understanding that the seller has right of refusal.

Still, repairs may fall into one of four categories: legally mandated repairs, contractually mandated repairs, negotiable repairs and conditions of minor concern.

Legally mandated repairs: Some conditions require repairs under state laws or local ordinances. These could be upgrading of smoke detectors or capacity of and condition of the septic tank. Such items are non-negotiable and must be addressed by the seller.

Contractually mandated repairs: These conditions are specified for repair in the real estate purchase contract. Examples would be that all broken windows are fixed and all components of the building are functional. The seller is required to take care of these defects.

Negotiable repairs: All property defects that are not contractually or legally mandated fall into this category. Make a list of these repairs and prioritize them in order of importance. Even if not legally required to do so, most reasonable sellers will address vital repairs such as structural problems or safety issues. It is perfectly legitimate for buyers to use their list of repairs in their negotiations with the seller to bring down the price. Sellers could, however, choose to make the repairs instead of negotiating on price. They may also choose not to address the issue.

Conditions of minor concern: Common property defects are usually regarded as disclosures and buyers are expected to accept them as conditions to be repaired after the sale. These would include peeling paint, old carpets, cracked pavement etc.

Once you have received an inspection report, review it using these four standards to separate the repairs into those that are required, those that can be requested and those that probably have to be accepted. At this point, you can work with you agent to formulate a letter of request for the sellers. When structuring this letter, you caould state that some defects will be accepted in "as is" condition and list these defects. This sets a tone of conciliation and establishes a willingness to be reasonable which is a good strategy for negotiation. The letter should then list the items for which repairs are requested, beginning with the items that are subject to the sellers' approval.

Sources include: Barry Stone, www. Housedetective.com



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Pamela Narang

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