Negotiating while under contract (after offer accepted)

Negotiating while under contract (after offer accepted)

Member since 2022 · 11 posts · 3 votes

Hi! 

I recently placed a $550k offer on a home priced at $599k on Zillow. The seller eventually agreed to $565k. The house was built in 1950. I am currently under contract until Tuesday. Can I still negotiate after finding issues during the inspections? Things work, but many things in the house are not up to code and seem like they could break soon.

I've done a general inspection of the house as well as an HVAC inspection. 

The HVAC system is from 1988. According to both the HVAC and general inspector, it seems many repairs had been done to the HVAC system throughout the years. According to them, after looking at the heating system, they inferred that multiple technicians worked on the HVAC system, and each one did their own hacky fix on it without talking to each other. The HVAC guy felt that the technicians who had worked on the heating system throughout the years were not HVAC technicians. They recommend replacing the entire system for $8.6k,  instead of investing $2k on it for minor fixes. They believe if it doesn't break down now, it will break down soon. 

After sending the general report to an electrical technician, he gave me a $2k quote to address all the electrical issues. There were many written in the report. One that I recall is that only 2 out of 30 plus outlets are grounded. 

Now insulation. The attic has barely any insulation, and according to the general inspector, the HVAC technician, and the insulation inspector who I sent the general report, it's definitely not up to code, and my electricity bill must be huge because of it. The insulation technician gave me a $2k quote.

Plumbing. The gas tank-based water heater is from 2008. It is my understanding, these need to be replaced every 10 years. I have not received a quote to replace the water heater tank yet. The water heater works though.

Based on this inspection, the house will need at least another $12.6k more investment. Can I use these quotes as an argument to keep negotiating the price down? Things work, but inspectors so far recommend replacing things.

Tomorrow, I will have a different electrician and plumber from  look at the house's electrical and plumbing system. I am just trying to get a second opinion. Any thoughts y'all?

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China, ME · Member since 2014 · 3k+ posts · 4k+ votes
4y
Whether you can negotiate depends on the language in your offer.  If you have an inspection contingency, you can negotiate to your heart's content.

If not, your options are to either buy the house or walk away and probably lose some or all of your EMD.

Bear in mind that you're not buying a new house.  Repair items are to be expected, but should be reflected in your offer price.
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  • China, ME · Member since 2014 · 3k+ posts · 4k+ votes
    4y
    Whether you can negotiate depends on the language in your offer.  If you have an inspection contingency, you can negotiate to your heart's content.

    If not, your options are to either buy the house or walk away and probably lose some or all of your EMD.

    Bear in mind that you're not buying a new house.  Repair items are to be expected, but should be reflected in your offer price.
  • Lien VuongBusiness Member
    Real Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes
    4y

    You can negotiate as long as that contingency is met, I would provide the quotes that you have as evidence but do it in a respectful way where the seller is not offended by your request and concessions. 

  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    4y

    Depends what your contract says

  • Real Estate Agent · Dallas, TX · Member since 2020 · 28 posts · 28 votes
    4y

    Moises – Based on your question, I presume you are not represented by a licensed real estate agent who could guide you through your rights and obligations within the contract. Even with buyer representation from a real estate agent, contract forms vary by state so it would be difficult to offer appropriate advice, other than to seek advice from a real estate attorney in your state. 

    That having been said, I generally agree with the other replies about looking at any contingencies within your contract (and their expiration dates, which will likely be sooner than the stated closing date). Here in Texas, the state promulgated forms make it simple to have the right to perform inspections and other due diligence, then:

    a.) back out due to the results of those inspections or other due diligence you've conducted;
    b.) re-negotiate terms with the seller (price or repairs); or
    c.) terminate the contract with refund of earnest money deposited

    With a contract that closes (or expires) in a few days you'll have to make these determinations quickly!

    If ever investing in Texas, please reach out... I'd be happy to assist from a brokerage or fellow investor viewpoint.

  • Real Estate Agent · Denton, TX · Member since 2020 · 6 posts · 5 votes
    3y

    @Moises Guerra Garcia as long as your still in your option period you can absolutely renegotiate. Use the inspection report as leverage

  • Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    3y

    You can always negotiate. The price I put a property under contract for is never the same price I close on, too many factors not to decrease price. Market is declining, interest rates suck etc....

  • Real Estate Agent · Metro Detroit · Member since 2022 · 66 posts · 28 votes
    3y

    I wouldn't lower my list price on repairing stuff that still works.  Everything breaks eventually.  

    If something is broken now, then I would either repair, offer concessions or say take it or leave it.  (Whatever my client wants). 

  • Kissimmee, FL · Member since 2018 · 150 posts · 27 votes
    3y
    Quote from @Lisa Wright:

    I wouldn't lower my list price on repairing stuff that still works.  Everything breaks eventually.  

    If something is broken now, then I would either repair, offer concessions or say take it or leave it.  (Whatever my client wants). 


    I think “still works” is relative to how effectively its working vs it just powering on and/or performing its general functions - if its not effective or wasting energy bc of negligence or age its as good as broken now. its just “performing” until is break - something harder to ascertain from just inspection. Repairing it until it breaks could be waste of money. Tough call for buyer. 

  • Real Estate Agent · Metro Detroit · Member since 2022 · 66 posts · 28 votes
    3y

    This is true.  But the house should be priced accordingly.  If everything is dated I'm not going to list at the same price point and a renovated home.  So if I've already marked it down $20,000 I wouldn't offer a concession on something that was evident or disclosed.  If its something we missed, then yeah.  

    But that avocado fridge is gonna work for another hundred years. 

  • Matthew MorrowBusiness Member
    Investor · PA - NY - NJ · Member since 2019 · 458 posts · 168 votes
    3y

    Lots of variables here- what does your contract say regarding inspection contingencies and associated timelines?

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