Advice Needed: Seller's Counter Offer Raises Concerns - LTV, Inspection Timing.

[Abhishek Agarwal]

Hello fellow homebuyers,

I recently made an offer on a house with an inspection contingency covering the roof, foundation, electrical, plumbing, backyard fencing, and pest infestation. The house is already occupied by a tenant and is on lease until April next year. The seller has countered with the following conditions:

1. - Loan to value (LTV): 80%
2. - Earnest money held by seller's recommended property management company
3. - Final inspection within 1 day of closing
4. - Commission paid by to buyer's agent is 2% of final sales price.

I'm seeking advice on how to proceed, as I have some concerns:

1. - Why would the seller request an 80% LTV? What benefit does this provide them?
2. - Does the "final inspection within 1 day of closing" replace my initial inspection contingency? If so, this seems risky as it leaves little time to address any issues? 
3. - Could the seller be trying to hide potential major issues in the house by leaving no room for inspection results or could it be just ensuring not to disturb the tenant?
4. - Is it normal for the seller to specify the buyer's agent commission? What 
5. - Should I be concerned about the earnest money being held by the seller's recommended company?

Any insights or recommendations would be greatly appreciated. I want to make sure I'm not overlooking any potential risks or unusual requests in this counter offer.

Thank you in advance for your help!

[Drew Sygit]

@Abhishek Agarwal these really aren't that bad once you really understand them!

1) LTV - seller doesn't want to you claim at last minute that you didn't get approved for a 10% NOO loan, so can't close and you want your EMD refunded.

2) PMC Holds EMD - PMC needs to be a licensed RE broker to do this. Seller wants them to hold EMD as easier for them to liquidate if you violate purchase contract.

3) Final Inspection - this really has nothing to do with your inspection request. Many buyers want to do a Final Walk-thru the day of or day before closing to make sure there are no surprises since their inspection.

4) Seller wants to only pay 2% commission, you will need to compensate your agent if they want more or your Buyer's Contract requires more.