Looking for some advice for re-negotiations with a seller

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Looking for some advice for re-negotiations with a seller

Steve Hicks
Suisun City, CA · Member since 2019 · 4 posts · 0 votes

I’m currently in the process of purchasing an “as-is” rental property for $100k. The inspector has just confirmed it will need a new roof. How should I now approach re-negotiations with the seller? Thanks 

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Charlie MacPherson
China, ME · Member since 2014 · 3k+ posts · 4k+ votes
5y

@Steve Hicks  Read your contract.  That and that alone will govern your options.

If there's a provision for inspections, you can do whatever that provision says.  If not, you can refuse to close, but may lose your deposits.

You can ask the seller for a concession, but if the contract doesn't allow for it, he's perfectly justified in refusing.

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  • Account Closed
    Member since 2021 · 154 posts · 108 votes
    5y

    As is kind of means just that.....as is. 

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  • Charlie MacPherson
    China, ME · Member since 2014 · 3k+ posts · 4k+ votes
    5y

    @Steve Hicks  Read your contract.  That and that alone will govern your options.

    If there's a provision for inspections, you can do whatever that provision says.  If not, you can refuse to close, but may lose your deposits.

    You can ask the seller for a concession, but if the contract doesn't allow for it, he's perfectly justified in refusing.

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  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    5y

    The practical side of as-is listings is typically that the seller does not want to is not in a position to deal with repairs - but you can still ask for a price reducation.

    Your agent did not alert you to the roof? Or is the inspector an alarmist? FHA for example requires 3 years of life left on a roof. At that point it is pretty obvious, no inspection needed. A roofs life can often be extended by a few years by replacing a few pieces and sealing up flashings - not much cost

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  • Eric James
    Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
    5y

    "As-is" means the seller won't make repairs. It doesn't mean you can't offer less. If your.contract gives you an option period for inspection, you can tell the seller you need to reduce your offer. You don't have to have a special negotiating tactic to convince the seller. Just tell them you need to offer less.

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  • Lien VuongBusiness Member
    Real Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes
    5y

    As-is is the acceptance of the property in an as-is condition, you can broach your agent about renegotiating but be prepared that the seller will push back and decline or you can walk away and he'll keep your deposit money. 

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    5y

    @Account Closed “As Is” doesn’t mean there is no inspection clause Or that the seller won’t make repairs/negotiate for a lower price.  It simply means the seller isn’t agreeing In Advance to make any lender required repairs.

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  • Account Closed
    Member since 2021 · 154 posts · 108 votes
    5y
    Originally posted by @Wayne Brooks:

    @Account Closed @Lien Vuong “As Is” doesn’t mean there is no inspection clause Or that the seller won’t make repairs/negotiate for a lower price.  It simply means the seller isn’t agreeing In Advance to make any lender required repairs.

     Never said there wasn't an inspection clause that allows the buyer to back out. Just that it's as is and the seller has no obligation to repair anything...it's as is.

    i sold some property as is and the buyer requested I pay to remove a trash pile. My realtor sent cry faces to their realtor in a text and said absolutely not on an as is sale.

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  • Joshua Morgan
    Loveland, OH · Member since 2018 · 25 posts · 25 votes
    5y

    When we had to renegotiate post-inspection on an as-is property, we prepared a written letter. This notice was required in writing to begin with by our contract, but we tried to use it for our advantage.

    For each item that we felt was above and beyond what was immediately obvious from a walk through and would substantially affect our rehab budget, we included photos or excerpts from the inspection report, as well as an estimated cost for repair.

    Then, we totalled up all the items and requested a priced reduction of 50% of the new items' cost. We weren't dishonest with our estimates, but we definitely used higher-priced estimates and included more items than maybe what was needed. We priced it assuming we would hire the work out, though we planned on doing it ourselves, etc. The end result was a reasonable list of extra items with 50% of their cost being about equal to what we sought the price reduction to be. We explained the 50% by saying something like "obviously we expected some surprise findings to come up after purchase and factored that into our initial offer price. With these extra items however, we feel that 50% fairly captures their unexpected nature while still allowing for our rehab plans to be possible" or similar.

    In our case, the seller had already had 2 or 3 other buyers back out after being under contract, so we emphasized that adjusting the purchase price would help us close and that we were personally committed to getting to closing if at all possible.

    We included some personal remarks (appreciate their patience, etc), signed it, included a photo of me and my wife, and submitted it through our agent and asked it be delivered alongside our new offer price.

    They accepted the 15% reduction by the next morning.

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