Negotiating After the Inspections on a New House.

Updated on September 19, 2012
G.B. asks from Miamisburg, OH
9 answers

We are in the middle of buying a house that is about 13 years old. The house inpection came back with a few things that needed fixed. We asked that the sellers get one of the problems fixed and just give us money for the others, and they agreed to the amount (not offically signed, negotiated in email). In our area, a check is given to the buyers at closing from the sellers for this type of thing. This house is in a different (but nearby) city, and their realtor said (after the fact) that she won't do handing us a check - she wants the contract (already signed pending inspections) changed to make that amount the closing costs. She said handing us a check from the seller's is illegeal. My realtor and the bank said "heck no" to changing our contract. The bank said it would throw up all kinds of red flags (and this bank works in the city we are trying to buy in). We're trying to work this out, but the seller's realtor has been a pain on a few other things too. My question is how do people handle fixing problems post-inspection? Is this a regional thing to handle it differently?

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So What Happened?

It's interesting to see the responses from other areas. The preprinted post inspection agreement from the local board of Realtors actually has a section on it that says "seller agrees to pay Purchaser at closing the sum of $______, representing the estimated cost of the following repairs to be made after closing." The agreement has been in use for years and has been reviewed by lawyers, so I don't think it would be illegal to follow it. I'm frustrated because the amount was agreed to then after the agreement their Realtor then said "let's make it closing costs and change the contract." Overall, selling and buying houses is a major pain, and I am SO ready to be finished!

More Answers

X.O.

answers from Chicago on

Are you retaining an attorney to represent you at closing? Since the legality of the check is in question, I'd consult a real estate attorney. Our atty fees for our recent purchase was $500. If you just have a simple question that can be easily resolved it should be quite affordable to have answered.

Another idea - www.Trulia.com is a great resource for both house listings AND even better, professional advice from local real estate agents. Perhaps you can post your question for the professionals in your area to answer. I got a TON of great answers to my questions when I posted there.

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S.B.

answers from Houston on

When we bought our house in Houston, they had the repairs done prior to closing and showed the receipts. When we sold our house in Kentucky, we did the same thing. I have never written a check for repairs and given it over to the buyer. Personally, I wouldn't want to do that.

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T.F.

answers from Dallas on

I've never heard of a seller handing over a check at closing.

If there were issues, they are either repaired or the price of the house is dropped for a certain amount for an allowance for the new buyers to make needed repairs.

When we purchased our first house, allowances were made for repairs and we repaired things as needed. When we sold that house, we made repairs that the buyer wanted BEFORE closing.

We've since gone on to build 2 homes. When we sold the first home we built, we made an allowance on the contract so they could put their choice of new carpet in a couple of areas.

It sounds fishy to me that a seller would hand over a personal check. That makes it sounds like something is being done under the table that is not right.

Good luck.

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A.C.

answers from Atlanta on

Our bank flat-out refused to accept a "money-in-lieu-of-repairs" contract. It's considered a risk for investing, I guess. When we bought our previous house, the money was given to us for repairs before closing with the understanding that it would be repaid if closing did not take place. In both cases, the repairs and the money were amended to be a part of the contract, or I wouldn't have been willing to do it. I've actually never heard of the money being given via personal check at closing - it seems to open you up for issues (what happens if the check bounces?). You could have the cost deducted from the house price, maybe. Or you could just require that all of the issues be repaired before closing. Good luck.

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J.P.

answers from Lakeland on

I own a few homes and have never been handed a check for needed repairs. Most often the seller will fix any problems or deduct it from the balance of the home. Most often if they are minor repairs the buyers will just accept them.

Did you consider that the seller may not have the money to write a check? Or that they may be paying out of pocket to cover some of the mortgage?

We have one home for sale in PA and we have dropped the price 100k if we drop it any lower we will have to come up with thousands to pay the balance of the mortgage (which we don't have). Try to look at their situation before you get angry over it.

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J.K.

answers from Wausau on

When we offered ont he house, our offer was accepted by the seller. The offer was "contingent upon inspection" which meant that if the inspection revealed problems, we would rescind or revise our offer.

If I understand correctly, the problem is that you and the seller had worked out a 'cash-back' deal. It may even be illegal.

Instead, because of what inspection covered, rescind your offer and submit a offer at a lower purchase amount. If your realtor won't do it, this speaks of shady practices.

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M.L.

answers from Houston on

I have never bought a house myself before, but have helped sell one, so my advice may not be totally right. But it seems that receiving a check from a seller is just wrong to fix issues. Usually, the money is taken out of the sale of the house or the closing costs per my understanding. I also don't see red flags about renegotiating the contract since the inspection only just happened. If nothing has been officially signed and no payments made, than the contract isn't even legit yet. I guess contacting an unbiased realtor or real estate attorney is the best thing here.

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G.H.

answers from Chicago on

Yes different states have different regulations. Different programs have different regulations too, etc. And there are so many more restrictions when it comes to how money is handled between seller, buyer, banks, realtors, inspections, title companies. Everything must be done properly or there will be problems. There are way to many variances to really know your particular situation. To be honest the best way to handle this is to let your lender & the title company make this decision. The realtor should know that it's not his/her decision how money is handled. And unless the 'transaction' between you and seller are on the HUD, it typicaly is not *legal*.

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I.G.

answers from Seattle on

We just bought a house a few months ago. Upon inspection there were several things that needed to be done, including some big ticket items... our agent changed the contract to amend what needed to be done, everyone signed and that was that.
I don't really see a big deal with changing the contract, it's all done electronically nowadays - a matter of hours. If it was me I would INSIST on everything regarding the transaction being in the contract ... (buying or selling).

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