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Would appreciate some first time home buying advice..re home inspection and negotiation

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Would appreciate some first time home buying advice..re home inspection and negotiation Stephen Huckaby 02-08-2005
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Posted by Doug Boulter on February 9, 2005, 5:02 am


2005:

> I am hoping that the report will save me from buying a
> "Money Pit."

I think you've figured out by now that you should have an
inspector, and there should be an inspection contingency in your
contract that will allow you to walk away with your deposit
refunded if you aren't satisfied with the report. At your option,
that can include the seller having to fix everything, both major
and minor.

So what you're really asking is how to negotiate with the seller
once you've seen the inspection report.

The most critical thing is to know what the house is worth. You
should have looked at all the sales of comparable houses in the
neighborhood in the last nine months. If you're getting a good
deal, you can eat a lot of repair costs. If you're paying at or
above the market, the seller should have to eat the repair costs.

Or better, give you a repair allowance or lower the selling price.
If you have a choice, you always want to do the fixes yourself or
have your contractor do them. If the seller does them, he or she
will spend the absolute minimum necessary. Faucet broken? What's
the cheapest one at the local home center?

If the seller is irrational or has expectations that are way too
high, he or she won't negotiate. At that point, it's up to you to
decide how badly you want that house.

I'm uncomfortable about you buying your first house without
professional advice. Perhaps you can find a buyer's agent who will
work for you for a set fee since you already have the house picked
out. If you're paying $5000 too much for the house, a $500 or
$1000 fee won't seem like much. If you lose your deposit, you may
lose a whole lot more than you'd spend for a professional.

--
Doug Boulter

To reply by e-mail, remove the obvious word from the e-mail address


Posted by Banty on February 9, 2005, 7:45 am


says...

>I'm uncomfortable about you buying your first house without
>professional advice. Perhaps you can find a buyer's agent who will
>work for you for a set fee since you already have the house picked
>out. If you're paying $5000 too much for the house, a $500 or
>$1000 fee won't seem like much. If you lose your deposit, you may
>lose a whole lot more than you'd spend for a professional.
>

On the other hand....

....I know someone who never took that plunge. Partly from fear that they'd not
do this house-buying thing exactly right, and might have a septic problem for
example (maybe 10K), or gosh forbid, pay too much (that 5K you're talking
about).

And has lost out over the past five years of the on-average 50-80% increase in
home sales prices over that time (well over 100K).

I took the plunge eleven years ago, new to town, in a very down market (largest
company in area had just laid off tens of thousands), and bought a house in a
great location, knowing about a possible septic problem (only needed new tank),
some possible water problems (3K for BDry). (All clay soil around here, damn
near every house I looked at had something..)

I've seen a 150% to possibly 200% increase in the value of the house and
property. (Yes, that's twice to three times as much.)

How this applies to the OP's situation depends on the particulars of course.

Banty



Posted by Duffaukid on February 9, 2005, 11:29 am



Excellent point.
My only concern is termites and maybe mold. So I'd get a termite
inspection from a termite company with termite insurance. Not sure
who I trust to do a mold inspection though.

If those come back clean then I'd buy the house and live with the
other defects.




>says...
>
>>I'm uncomfortable about you buying your first house without
>>professional advice. Perhaps you can find a buyer's agent who will
>>work for you for a set fee since you already have the house picked
>>out. If you're paying $5000 too much for the house, a $500 or
>>$1000 fee won't seem like much. If you lose your deposit, you may
>>lose a whole lot more than you'd spend for a professional.
>>
>
>On the other hand....
>
>...I know someone who never took that plunge. Partly from fear that they'd not
>do this house-buying thing exactly right, and might have a septic problem for
>example (maybe 10K), or gosh forbid, pay too much (that 5K you're talking
>about).
>
>And has lost out over the past five years of the on-average 50-80% increase in
>home sales prices over that time (well over 100K).
>
>I took the plunge eleven years ago, new to town, in a very down market (largest
>company in area had just laid off tens of thousands), and bought a house in a
>great location, knowing about a possible septic problem (only needed new tank),
>some possible water problems (3K for BDry). (All clay soil around here, damn
>near every house I looked at had something..)
>
>I've seen a 150% to possibly 200% increase in the value of the house and
>property. (Yes, that's twice to three times as much.)
>
>How this applies to the OP's situation depends on the particulars of course.
>
>Banty



Posted by Tony Hwang on February 11, 2005, 7:38 am


Stephen Huckaby wrote:
> First I'd like to say I'm a upright, honest sort of guy.
> I'm buying my first home from someone, the seller/home owner.
> When I went to the morgage broker he suggested having a home
> inspection before making the contract final - and I would be the
> one to pay for the inspection. No problem.
>
> When I told the Seller, he said he had no objections to the
> inspection, but he was told by a "friend" who buys and sales
> homes, that people often take the Inspection report to the
> bargining table and use it as a deal breaker, ie, EITHER FIX ALL
> THE PROBLEMS IN THE REPORT or DROP THE PRICE OR WE WALK.
> And the seller said when he quoted me a price, he gave me the
> firm bottom price. He had it marked up to 'account' for any
> negotiation.
>
> I have to tell you this never, never occured to me. I am hoping
> that the report will save me from buying a "Money Pit." I
> realize the home I am trying to buy is not new and there will be
> MINOR problems.
>
> I don't have a friend who is a realestate agent to ask these
> questions. Not even a friend of a friend of a friend who saw a
> show.......
>
> But, while I know some wear and tear is quite reasonable, what is
> not. The easy answer would be "What can you afford." But that
> is not a good answer. It the report comes back with a problem of
> say Water Damage and $2000 to repair, should I eat the cost
> What about $5000 for the Damage or $10 K.
>
> ANY ANY ANY ANY advice whatso ever you can give me re buying
> my first home would be greatly appreciated.
>
> If I sound Ignorent, its cuz I is. Please help me.
>
> All apollogies if this is not the right Forum to post this
> questions, but I lurked for a while and the people of this group
> seemed to be in the know.
>
> Stephen H.
>
Hi,
Get a reputable realtor and also have inspection done. You don't have to
deal directly to the seller, realtor's job that is to negotiate on your
behalf. Remember there are crooks everywhere. Seller, realtor, even
inspectors.
House buying is chain of negotiations and conditions.
Remember, most important on house buying is the location, location,
location of the house.
Good luck,
Tony


Posted by jeffc on February 13, 2005, 4:28 pm


Typically bid contracts include a clause that says if an inspection
discovers repairs that exceed some amount (say $2,000), then you are no
longer obligated. In other words, if the buyer is willing to fix those
problems that add up to less than $2,000, you still have to buy the house.
If the buyer is not willing to fix those problems, or the problems add up to
more than $2,000 even if the buyer is willing, then you can legally walk.




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