what now after inspection?

[therealpotentials]

Hi. I had professionally inspected a property that I have already put a purchase offer on. One of my purchase conditions is that the property is subject to a professional inspection. In general, the property is still acceptable, but there have been a number of items that need to be repaired. What should I do now? Could I demand that these items be repaired before the purchase be finalized? Thanks.

 

[manojsingh]

Request for discount so that you can done these on your own because you do not know that they will do the repair as per your satisfaction. The disadvantage that this will decrease your cash on cash return.

 

[Sherilynn]

On our recent purchase, an inspection revealed a wiring issue that we would like to upgrade. So we asked for cash-back at closing. This way the repair money is added to our mortgage instead of out of our pocket.

I must praise our realtor (Brian Ashford of ReMax Advantage) because not only did he get cash-back but at the same time he also asked for and received an extension on our condition removal (the bank had not yet reviewed the appraisal). So on condition day he basically said to the seller, "Hey, we want some money and we`re also going to leave you hanging for a few more days, ok?"

My point is that a good realtor should be able to negotiate cash-back to cover at least some of the repair costs. Some sellers may want to have the money held in trust until you can prove that the repairs have been completed (receipts or photos should do).

Regards
Sherilynn

 

[Dan_Eisenhauer]

You told us, "In general, the property is still acceptable". What is preventing your accepting it and closing the sale? No house is in perfect shape, especially one that is several years old. How badly upset by the inspection are you? If these are small maintenance items, accept the inspection, and do the work yourself.

However, if they are items that show deficiencies in the integrity of the building, or the working systems, such as heating, then ask for a reduction in price, and correct the problems after you have moved in.

In Nova Scotia, at least 8 years ago, they use a $ amount ($5,000 as I recall) with which to judge whether or not the Buyer can use the inspection to withdraw from the agreement.

 

[Thomas Beyer]

QUOTE (therealpotentials @ Nov 17 2008, 08:10 AM) Hi. I had professionally inspected a property that I have already put a purchase offer on. One of my purchase conditions is that the property is subject to a professional inspection. In general, the property is still acceptable, but there have been a number of items that need to be repaired. What should I do now? Could I demand that these items be repaired before the purchase be finalized? Thanks.
some comments:

a) "Subject to a professional inspection" is NOT a condition !! It is bad / incomplete English and incorrect. Now that the inspection is done you have no right to get a discount. The seller could (but may not) state that you had a professional inspection and that you should now remove your condition. He could sue you if you do not do that !! He likely won`t .. but be very careful how you word a condition.

b) The sentence should state: "Subject to a professional inspection satisfactory to purchaser". Now that the inspection is not satisfactory to you you can:
- walk away, i.e. do not waive the condition
- change the contract, while still leaving it conditional, say on financing
- change the term of the contract, and go unconditional

You could send this amendment form

================================

Contract Amendment and Condition Waiver

The contract MLS # _________________ dated _____________ contains a condition, namely clause __________. Clause ____ is hereby waived and purchase price is hereby reduced from ______________ to ______________.

All other terms remain in effect.

This is now an unconditional contract once signed by buyer and seller

Signed: _________________________ (buyer)

Signed: _________________________ (seller)


============================================

The risk is that you will lose the contract if he doesn`t agree on your price reduction. Hence you have to be sure that you only wish to buy it with this amendment and not the original price. You may decide that the items are minor and buy it anyway !

You could also use this form, where you ask him to repair it, or keep the $s in trust, which may not increase your cash to close, so this is preferred:

============================================

Contract Amendment and Condition Waiver

The contract MLS # _________________ dated _____________ contains a condition, namely clause __________. Clause ____ is hereby waived and seller agrees to fix the following items:

a) ___________
b) ___________
c) ___________
..

Buyer and seller agree that a holdback (in trust with purchaser`s lawyer) of $12,000 is reasonable in order to ensure that these items are fixed by _________. Upon possession date purchaser will confirm repair status and will then release $s in trust if all items have been repaired. Seller may chose not to repair items and buyer is then authorized to use $s in trust for repairs.

All other terms remain in effect.

This is now an unconditional contract once signed by buyer and seller

Signed: _________________________ (buyer)

Signed: _________________________ (seller)

 

[therealpotentials]

Thanks for all your informative advice. Actually the exact wording goes exactly like this,

Property Inspection Report
As per Property Inspection, this Contract is subject to the Buyer`s approval of a property inspection.

To update you all, well I did ask for a discount...unfortunately it was declined. The seller said that the price was too low already.

I wonder if I could still demand that the minor repairs be done. Or should I either accept it as it is or walk away with it?





QUOTE (thomasbeyer2000 @ Nov 17 2008, 11:41 AM) some comments:

a) "Subject to a professional inspection" is NOT a condition !! It is bad / incomplete English and incorrect. Now that the inspection is done you have no right to get a discount. The seller could (but may not) state that you had a professional inspection and that you should now remove your condition. He could sue you if you do not do that !! He likely won`t .. but be very careful how you word a condition.

b) The sentence should state: "Subject to a professional inspection satisfactory to purchaser". Now that the inspection is not satisfactory to you you can:
- walk away, i.e. do not waive the condition
- change the contract, while still leaving it conditional, say on financing
- change the term of the contract, and go unconditional

You could send this amendment form

================================

Contract Amendment and Condition Waiver

The contract MLS # _________________ dated _____________ contains a condition, namely clause __________. Clause ____ is hereby waived and purchase price is hereby reduced from ______________ to ______________.

All other terms remain in effect.

This is now an unconditional contract once signed by buyer and seller

Signed: _________________________ (buyer)

Signed: _________________________ (seller)


============================================

The risk is that you will lose the contract if he doesn`t agree on your price reduction. Hence you have to be sure that you only wish to buy it with this amendment and not the original price. You may decide that the items are minor and buy it anyway !

You could also use this form, where you ask him to repair it, or keep the $s in trust, which may not increase your cash to close, so this is preferred:

============================================

Contract Amendment and Condition Waiver

The contract MLS # _________________ dated _____________ contains a condition, namely clause __________. Clause ____ is hereby waived and seller agrees to fix the following items:

a) ___________
b) ___________
c) ___________
..

Buyer and seller agree that a holdback (in trust with purchaser`s lawyer) of $12,000 is reasonable in order to ensure that these items are fixed by _________. Upon possession date purchaser will confirm repair status and will then release $s in trust if all items have been repaired. Seller may chose not to repair items and buyer is then authorized to use $s in trust for repairs.

All other terms remain in effect.

This is now an unconditional contract once signed by buyer and seller

Signed: _________________________ (buyer)

Signed: _________________________ (seller)

 

[Karma]

We just went through this with a single family unit that we purchased. We bargained and had an agreed upon offer of 155 on a 163 asking price with the condition of a Home Inspection. We then hit them up with an amendment offer of 152 to take into account potential foundations problems that "may exist" on a back porch addition. I provided a copy of the report with the amendment with the deficiencies highlighted and an explanation for the price reduction and they accepted it- the best $350 you `ll spend- it saved my 2650 instantly!

S.G.

 

[Nir]

If it was a good deal before, then "minor repairs" should not suddenly make it a bad deal now. Therefore, definitely accept it and congrats!
(unless the deal was bad to start with or the "minor repairs" are not really "minor").
Again, congrats and good luck!
Neil

 

[SusanPenner]

Thanks for that wording Thomas! I`ve been wondering how to fix the wording in my contracts after I walked away from a property after the inspection showed massive water damage to the 2nd bathroom into the basement and a few other issues. The Seller wanted me to still buy it without any reduction to the negotiated price which didn`t sit well with me. This wording will make it crystal clear to future sellers, that me as the buyer has to be satisfied with the house they are selling! I have no problem doing some renos....but the property just before this one turned into a month reno...and I couldn`t see us going through that again right away!

 

[Thomas Beyer]

QUOTE (therealpotentials @ Nov 17 2008, 07:09 PM) Thanks for all your informative advice. Actually the exact wording goes exactly like this,

Property Inspection Report
As per Property Inspection, this Contract is subject to the Buyer`s approval of a property inspection.

To update you all, well I did ask for a discount...unfortunately it was declined. The seller said that the price was too low already.

I wonder if I could still demand that the minor repairs be done. Or should I either accept it as it is or walk away with it?
You can`t demand. You can always ask. He has no obligation though, UNLESS there is a TERM in the contract that has a warranty that covers you such as "Seller warrants that all items are in good working condition" .. They may not be in good working condition.

Usually older properties are bought "as is" .. and some wear and tear is expected .. and you have to decide if the price is right given the blemishes ..

 

[DaveRhydderch]

QUOTE (therealpotentials @ Nov 17 2008, 07:09 PM) Thanks for all your informative advice. Actually the exact wording goes exactly like this,

Property Inspection Report
As per Property Inspection, this Contract is subject to the Buyer`s approval of a property inspection.

To update you all, well I did ask for a discount...unfortunately it was declined. The seller said that the price was too low already.

I wonder if I could still demand that the minor repairs be done. Or should I either accept it as it is or walk away with it?

You could demand they be fixed or they lower the price or you`ll walk. If really depends on how motivated they are. With my clients, I have had success saying to the seller, "Hey these repairs will cost 3,000 to repair, but we`ll split it with you and go 1,500". Like mentioned earlier, no house is perfect and any decent inspector will find items in need of repair or attention. So doing this is a bit of a squeeze tacit, and a knowledgeable seller will not go for it unless they`re very motivated.

Use at your own discretion. Worse case scenario, you ask, they decline and you buy it anyways.

Note: if there is a great deal of repairs (i.e. a roof), don`t do this.