Most residential sales involve buyers exercising “due diligence” to investigate the condition of properties.
The buyers agree to pay the sellers a specific amount of money based on:
- What they think about the house in question
- The current market (“comparable” listings and sales)
- Any information the sellers may have disclosed
- How much the buyers want to make the house their home
The days connecting the accepted offer to taking physical possession involve two primary tasks for buyers.
One is remaining convinced that they want to move forward; the other is proving they can finance the sale (lender financing includes getting a mortgage commitment, and then the loan).
The sales contract provides both the buyers and the sellers “opportunities” or “contingencies” to exercise due diligence.
They can select different options and then utilize or waive them. These options provide specific rights to each side — including terminating the sale. Failure to comply with the terms of the contract may have legal ramifications, including the loss of earnest money on deposit.
Once we have a fully executed contract, various time frames start ticking.
The home inspection contingency is typically the first contingency on the timeline, and it may include an inspection of the whole property as well as specific tests for wood infestation, radon, well, septic and other issues ultimately affecting buyers’ willingness to move forward or the sellers’ financial ability to address concerns.
The inspection results are “relative.”
Relative to what?
What did the buyers see, think or know at the time of their offer? Were any issues obvious, expected or unknown?
The inspection results are a prism through which buyers will re-evaluate the offer.
Once inspection results are known, the buyer has the option to accept the house, to request repairs or credits (depending on what a lender allows) or to terminate the sale.
I believe that once a purchase agreement is fully executed, one party is happier than the other. Those feelings may carry throughout the process.
Did the buyer pay more than they really wanted to pay, or did they pay less? Did the seller achieve more or less than they wanted?
Negotiating the inspection results will depend as much on how the parties felt at the beginning of the process as anything else.
This is the point where both sides get to “adjust” the sale to align with their feelings. And experienced agents understand that there is more to negotiating a sale post-inspection than what an inspector may have found.
Andrew Wetzel is an associate broker with Long and Foster Real Estate in Havertown, Pennsylvania. Follow Andrew on Facebook or Twitter.