Negotiating after inspection on “as is” sale
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Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
7y@Brad E. I know the as-is clause in our state contracts allows a buyer to exercise his inspection contingency and get his deposit back if something comes up in the inspection that would make the buyer want to back out. The as-is clause just states that the seller isn't willing to make any repairs for issues that come up in the inspection.
Yes, if things come up you can absolutely negotiate a credit and/or repairs to be done if there is an as-is clause. 50/50 proposition if the seller will be willing to play ball.
Keep in mind, at the point where you will be negotiating on the inspection issues you will be 1-2 weeks down the line in the transaction and the seller will have in his mind that he is close to getting rid of the property. In a completely different place mentally than when he was staunch about the as-is clause, which could potentially benefit you.
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- Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes7y
if you sign the contract with as-is, that could limit your ability to get repairs done. We have listed, and bought property where there are no repairs to be done by the seller, ofyen times the sller is a bank, a lender, or an estate; with the latter sometimes being insolvent.
Another issue which you don't mention is the disposition of your deposit. Typically in an as-is, no repairs contract, sometimes without a mortgage contingentcy, if you don't close you forfiet your deposit. You want to safeguard this from happening.
Also I would strongly suggest that you both have an inspection and be present at the inspection to ask questions, and make sure the contract allows for you to get your deposit back.
- Investor · Taylor Mill, KY · Member since 2016 · 2k+ posts · 964 votes7y
@Brad E. I don't think it hurts to try, probably not likely the seller will do anything, but I'd try it unless 183k is a steal but knowing it fell out of contract twice, I doubt that.
- Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes7y
@Brad E. of course you can try to negotiate, but it sounds like you are dealing with a stubborn seller and I would not expect too much. You already have agreed to an "as-is" purchase, so the seller could react irritated if you ask for additional concessions.
The intent of the seller with "as-is" clauses is not always clear, sometimes they just don't want to do any repairs, but are willing to adjust the price or give closing cost credits. Sometimes they see it as a take it or leave it offer like your agent is suggesting.
It also depends on the nature of the issue. I recently got pulled into an "as-is" deal to help out another agent, where the seller had agreed to a lower price and in exchange would not even want to do a $200 repair at this point - later the inspection discovered that an addition to the house had been built over the risers of the septic tanks. Aparently neither seller nor listing agent were aware of this. The attitude of the seller changed, now they have agreed to a $26,000 job.
How they bought the house 15 years ago without discovering this, is beyond me. Their agent should have noticed that there were no risers to be seen anywhere, if not at least the home inspection should have caught that...
Anyhow, so yes, depending on the nature of what the inspection finds you can try to negotiate additional concessions, but I would not set my hopes to high that the seller will agree.
- 7yJaron WallingPro MemberRental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
I tried the seller credit tactic on a property. If the seller came down a lot on price and the inspection goes good they probably won't budge. Like others have said it doesn't hurt to try. Good luck man!
- Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes7y
@Brad E. I know the as-is clause in our state contracts allows a buyer to exercise his inspection contingency and get his deposit back if something comes up in the inspection that would make the buyer want to back out. The as-is clause just states that the seller isn't willing to make any repairs for issues that come up in the inspection.
Yes, if things come up you can absolutely negotiate a credit and/or repairs to be done if there is an as-is clause. 50/50 proposition if the seller will be willing to play ball.
Keep in mind, at the point where you will be negotiating on the inspection issues you will be 1-2 weeks down the line in the transaction and the seller will have in his mind that he is close to getting rid of the property. In a completely different place mentally than when he was staunch about the as-is clause, which could potentially benefit you.
- Rental Property Investor · NorCal · Member since 2018 · 399 posts · 222 votes7y
Virtually anything is negotiable, anytime. A little story where I learned a few lessons: My agent said at the start, when I complained I felt I was paying too much he said, "I have always been able to get my buyer great credits after the initial offer.” We can negotiate, even though we will include our offer as is. When inspection came back that the roof was near its end, I told my agent to take the report to the seller and get me enough to buy a roof. That's when he balked and reminded me we offered as is, adding, you're getting a good deal. I thought for a while on what he said vs. what he said at the start and concluded he just got lazy. We never worked together before so he didn't know me. I called him back and said, fine, I'll simply not comply with whatever the lender needs (lending contingency) from me and thus my out will be that I couldn't get financing. Please go get my credits. He woke up, showed up for work. Long story short, he got me 14k in credits, about twice the cost of a roof. I learned not to be too alarmed over an 'as is' offer. Plenty of ways to negotiate around that. Go for it. What's the worst that will happen? They say no. Then you decide to stay or walk.
- Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes7y
You negotiated a price to the point they said ok, but it is as/is....the implication is there is no further negotiation involved on it. Now the contract may state that you can still negotiate.... but then I would expect when you do, do get massive push back, and possibly have your EMD tied up if you try to cancel the contract.
In fact, when Im on the listing side, if it is an out of stater who has not seen the property....Im only selling to them if it is a nonrefundable EMD.
District Invest Group546 Reviews - Real Estate Agent · Vienna, VA · Member since 2016 · 289 posts · 253 votes7y
Generally, the as-is clause means that they won’t make any repairs; however, if you have an inspection contingency, this usually means that you can walk away if you don’t like something that you discover during your inspection. At this point, you can tell the Seller that you are walking away, unless he/she reduces the price $X.
Now, contrary to what some people said, I don’t see the inspection contingency as a negotiation opportunity. If you are doing one deal, it may seem like a good strategy to beat the price down as much as you can. But long term, both Sellers and brokers will know you are the type of Buyer who always renegotiates contracts and they hate that. You’ll have a harder time getting deals presented to you and/or offers accepted
When I negotiate the price and terms, I made clear that this is the price we will be closing on, unless there’s some major issue discovered during the inspection period. Basically, I factor in my purchase price capex such as roof, water heaters, HVAC’s, etc. I will renegotiate a contract if there are a) foundation/structural issues, b) code violations, c) major electrical issues not visible, and/or d) actual financials/leases are very different than the figures used to market the deal.
- Rental Property Investor · NorCal · Member since 2018 · 399 posts · 222 votes7y
I might clarify what I stated above on renegotiating. That roof was a large, unexpected issue. I'm not the nuisance buyer. As a seller I would not appreciate a nitpicking buyer. There were other things from the inspection I saw as nitpicking that I declined to bring up. I picked my one and only battle and let the little skirmishes win. Having said that, if you don't ask, the answer is always no, and if it's important enough to you and you don't get a yes, do what you must to walk away.
I will point out that my agent was who taught me to include "as-is" in the offer to stand out from other offers to get accepted and that his tactic is to come back later for credits as the seller sees the closing date and his payday coming closer. As the closing date looms and they begin smelling money that they become more amenable to negotiating. He said he has been successful 100% of the time he uses this tactic with sellers. And man, did he deliver for me. Whether another seller or agent might disagree, it worked quite effectively for me on this deal. And here's what I think is the bottom line: The sign that a buyer and seller are satisfied with the deal is that they close on it. If you feel like you need to change the deal, at whatever stage you are in it, then ask. If your agent tells you it's bad form, then decide if you prefer good form or a good deal (as you define it). Who's money is on the table? Enough said.
Except for this... there was healthy tension between me and my agent. He sometimes exasperated me and me him. There were times I wanted to kiss him. I know my wife would have when I told her about the 14k credit. I won't do another local deal without him.
- 7yBrad E.Investor · Athens, GA · Member since 2015 · 205 posts · 66 votesOP
Hey guys I really appreciate all the feedback. This has turned even more interesting over the last couple days....
This is a triplex that was converted at some point from a duplex. 2 units share everything utility-wise. The other is independent.
On my first visit I took my termite guy and contractor. Long story short, no one could find access the the crawl space, but there definitely is one. Still trying to figure out what is going on there. I have submitted extension to my due diligence while we figure this out.
I also happened to bump into one of the tenants when I was leaving and she menitoned having to share a mailbox with one of the other units. Hm. That seemed weird.
I ask my agent about why that might be she said probably no big deal, just add another mailbox.
Because I've had several instances of conflicting info from different parties (not just on this deal) I try to validate anything somebody tells me with at least one other party.
So I called USPS about adding a mailbox and they said no I have to contact the county.
I contact the county and after a few tries got routed to the code enforcement department. Talked to the lady a litte and shared my concerns.
She said she would do some research and get back to me tomorrow.
Given all the above I am starting to wonder if the triplex is even permited properly.
I dont know what else I need to be looking out for here so if you guys have any thoughts on that I'd love to hear them. Thanks again.
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