Negotiation advice selling rental

[Lance Adderly]

Hello. Newbie real estate investor looking for any advice to help me decide how to approach this negotiation. Currently trying to close on an out of state sale on a SFH rental with a tenant scheduled to move out at close. Of course after their inspection the buyer has their "fix it" list and its quite long (per my realtor) On my end my PM had an estimate performed on all items listed by the buyer, totaling $6,250. We went back and forth with several proposals and it lead to my most current counter and preference was not perform any repairs and to reduce the price by $5000 and after close a $5000 check is given to the buyer to complete the repairs as they see fit. The buyer accepted and wants the home but did not sign the addendum. They want everything repaired or back out. I'm trying to sell sooner than later and I am considering repairing the work up to $5000 but because Im coming out of pocket Im worried the buyer could back out of the deal or any other requests. Anything is possible but has anyone been thru similar negotiations and is somewhat the norm to hear? Any examples to share?

[Benjamin Aaker]

Hi Lance,

Many of the issues discovered by an inspection are going to be material defects and your state law probably requires you to disclose it to future buyers. You are probably going to have to pay for the repairs anyway. Negotiate now for what repairs you will do to close the deal. Inspectors typically find a laundry list of stuff but not everything needs to be repaired. You should take a look at the inspection (the buyer needs to give this to you so you know what to repair) and determine what are the critical items. You foot the bill and have them repaired because you'll have to do this anyway. You can then negotiate a nominal amount to cover everything else. Have your agent write an addendum stating what you'll repair and that everything else is covered by the credit you'll pay at closing. I suspect the reason the buyer is acting strange is that they are scared of one or more repair issues. Take away this fear by getting them fixed. 

[Theresa Harris]

How long did it take you to get an offer?  It is a risk for a few reasons for both you and the buyer. The buyer should want to have someone do the repairs, not you.   they should also realize that no house is perfect and there will be repairs-many of those should have been factored into the offer price.

Ask the buyer what guarantee there is that they won't walk after all the repairs are done?  As you are out of state, does your realtor have a good person who you can hire to get the necessary things fixed (ie things that will be a concern for any buyer)?

[Bill Brandt]

You have them $10,000 to do $6,250 in repairs and they still aren’t happy? ($5,000 price reduction and $5,000 check at closing.)

As far as I know, the last signed contract is still active if they go past their inspection period. Your realtor should tell you what’s going to happen fi they don’t sign but certainly you don’t have to give them a discount or a check if they don’t sign it. And if their inspection period has passed you at least get their earnest deposit. 

Both realtors should be on top of this as it’s how they get paid. It sounds like the buyers realtors dropping the ball. In the future put deadlines on addendums.  Good luck. 

[Theresa Harris]

If the buyer accepted the $5K reduction and $5K check at closing, then they need to sign the addendum or they haven't accepted it.  If they get it repaired, then they do not get the $5K reduction OR the $5K check at closing.  Give them a deadline to decide. I agree with Bill, the realtors need to get this sorted.

[Andrew Syrios]

Personally, I would hold my ground. If they came to an agreement and then backed out (even if they didn't sign) that's really slimy. If the buyer wants the home, they should cave. If not, I'm not sure they would have fulfilled their end of the bargain anyways given how they've behaved to this point.

[Eliott Elias]

Always give money, do not do the repairs. Counter with 3k