Doug’s Blog

How to Properly Negotiate a Request for Repairs (CAR-RR) While In Escrow

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Most potential buyers believe the toughest part of purchasing a home is negotiating the purchase price (offers, counter offers, etc.) and other terms associated with purchase contract (CAR-RPA) (COE date, Seller paid closing costs, Home Warranty, Escrow/Title, etc.). By that point, buyers tend to think that the fight is over and the rest of the escrow period should be “smooth sailing” the close of escrow. The reality, though, is that the fight has just begun.  The knock out round starts right after the Physical Inspection has been completed and a Request for Repairs is drawn up collectively by both buyer and their representing real estate agent, aka the selling agent. I have never in my 25+ years involved in the Real Estate Industry, had to literally fight “tooth and nail” with listing agents and the sellers over items on the RR that are legitimate code violations and/or safety hazards and they simply refuse to fix or offer unrealistic dollar compensation to get the repairs done in a professional manner. Here are my tips for negotiating repairs after a home inspection. Use A Reliable Property Home Inspector: Do your research as the buyer to find a reputable and fully licensed home inspector.  You real estate agent may refer you to someone but you as the buyer have the right to pick your own. I refer a Proeprty Inspector that I have worked with for many years.  He is fully accredited and licensed and I know that he truly has my client’s best interest in mind.  I have on two occasions had him tell my client’s simply not to buy the home and I completely agreed with him.  The physical inspector must be fully aware of current building codes and what are code violations in the geographical are that he works in.  The reason being that what seller and listing agent think is an insignificant repair request could indeed be a safety hazard and must be repaired. Always Ask For A Credit For The Work To Be Done The sellers are on their way out. If the property is moving toward closing, they’re likely packing and dreaming of their new home. The last thing they want to do is repair work on their old home. As a result, they may NOT approach the work with the same conscientiousness that you, as the new owner, would. They may not even treat the work as a high priority. If you take a cash-back credit at close of escrow, you can use that money to complete the project yourself. Chances are you may do a better job than the seller, too. Finally, if you get the credit, there will be less back and forth to confirm the work has been done. I have had many an incident where the repair work what not completed by a licensed contractor much less a competent handyman but obviously was done by the seller and was not done in manner that would be acceptable to anyone.  Itemize the costs, request that dollar amount, and be in control of the repairs is the best way to go. Fight The Big Fight I have had buyers that have wanted repairs to flooring that they were soon to rip up and replace; a new sink because there was a small scratch; and other frivolous repairs that will overwhelm a seller and cause him to push back, i.e. cause the seller to deny even the code violations. Buyers “cloud the water” by asking for what I call esthetic repairs almost to the point of being upgrades. These things can get fixed during a future renovation. The requested repairs should be items that are safety issues, code violations, repairs that only can be made prior to a buyer moving into the home. Hold Your Cards Close To Your Chest You and your agent should not have any verbal discussions with the listing agent and seller or for that matter any discussions within ear shot of either of those two parties.  All negotiations should be on paperwork, i.e. CAR forms related forms related to the request for repairs.  As an example idle chatter with your inspector or agent (who should be present at the inspection) concerning your soon to be plans to renovate the kitchen within in hear shot of the seller could cause you not to get the repairs desired on the microwave that is too close to the gas burning stove – a certain code violation.
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