Can you still negotiate during a due diligence period even if your sales agreement was "as is"?
The scenario is I found that the duct work in the crawlspace of a single family home I have under contract needs to be completely redone. The cost will be somewhere around $4,000. I do not want to back out of the deal, but I would also like for myself and the seller to meet in the middle if possible.
With an "as is" purchase I know no repair requests are allowed. However, Is it within my right to renegotiate some aspect of the orginially agreed upon terms? I'm up for all ideas, even creative ones.
Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
5y
There is never a time, ever, that you cannot negotiate. The real question is "What is your leverage?"
You could choose not to buy the house. You might lose your deposit, and they would have to put the house back on the market and should disclose that the ductwork is deficient. Seems there is some leverage there, but only if you are willing to walk away. On the other hand, if there was a lot of competition for the house, the sellers might be very willing to roll the dice by relisting and may be glad that you backed out.
Specialist · Denver, CO · Member since 2017 · 59 posts · 30 votes
5y
Hi Duncan,
Yes you can negotiate during the due diligence stage and you can try to negotiate at any point in the sale process until close.
If you end up not being able to move forward during your due diligence, your earnest money deposit should actually be fully refunded to you, provided you put in the contract that your offer is contingent on your ability to do your due diligence.
There were several deals I worked on where additional repairs were found during our due diligence that necessitated negotiation.
What we did was thoroughly explain to the seller the impact of the additional expense and then offer them the options of moving forward at a lower purchase price, or working out terms at the same price (owner financing/sub2/something else), or cancelling the agreement.
Usually, the seller would choose to move forward at a lower purchase price but we definitely had parties choose to cancel or finance too.
If they chose to move forward at a lower purchase price, we'd write up a simple 1-sentence addendum to the original contract stating the new purchase price and have both parties sign.
You may want to include a deadline in writing of when the seller must respond by before you move forward with cancellation so you don't lose your EMD.
Can you still negotiate during a due diligence period even if your sales agreement was "as is"?
The scenario is I found that the duct work in the crawlspace of a single family home I have under contract needs to be completely redone. The cost will be somewhere around $4,000. I do not want to back out of the deal, but I would also like for myself and the seller to meet in the middle if possible.
With an "as is" purchase I know no repair requests are allowed. However, Is it within my right to renegotiate some aspect of the orginially agreed upon terms? I'm up for all ideas, even creative ones.
Thank you!
Yes you can. "As is" really just means the seller will do no repairs. Perhaps they're saying they won't renegotiate too, but you can always ask for a price reduction. Worse they can do is say no.