This article lays out the basic 12 tips for homebuyers to use when preparing to buy a home:
The local market has been very competitive lately, with multiple offers on every quality offering. Here are other things for home buyers to expect from sellers once you start making offers.
These aren’t thought out clearly by listing agents; instead, they are things done to them on previous deals so they will want to impose them on you whether they make sense or not:
1. They will want you to shorten your contingency periods.
The common belief is that shorter periods will make you move faster, and then blow you out quicker if you aren’t a player. But in reality, buyers get irritated and want to pay less or cancel as the manipulations start mounting.
2. No appraisal contingency.
Buyers are prone to think, “But this is your price, and you want me to risk the appraisal coming in low?”
3. Seller rentback.
Sellers want you to fund their retirement account, and have you let them live in your house for free for weeks or months. Make sure the rent is retail-plus with heavy penalties if they don’t leave on time to ensure they move as agreed. Consider that the seller could declare bankruptcy the day after closing and make your life miserable for six months.
4. Ernest-money deposit.
Even though it is refundable until you sign off all contingencies, the sellers will want you to increase it, just to make sure you know who the boss is.
5. Buying ‘as-is’.
It already says in the contract boilerplate that the property is sold “as-is”, but the listing agents will mention it again just so you don’t get any ideas about asking for seller repairs. Once you complete your inspection, the sellers and agent will expect you to live with any defects – regardless of how much you paid.
6. Seller disclosures.
The confidence is already running high, so if there are any borderline disclosure issues, they might get left out by the sellers. Make sure you thoroughly inspect the property, neighborhood, and HOA!
7. Escrow and title companies.
Don’t even think about selecting your escrow and title companies, and expect that the seller choices on both will include some ‘co-ownership’ fine print later (i.e. kickbacks).
8. Removing attached items.
Items attached to the home are part of the real estate, and are included in the sale by definition. But don’t be surprised if the sellers strip out all the good stuff (TVs, lights, window coverings, etc.), and leave you with holes.
9. Termite clearance.
Ha ha, very funny. The sellers will expect you to live happily ever after with their termites, just like they have.
10. Listing agent dominates the home inspection.
Buyers deserve to have a good look around during the home inspection, and get comfortable with what they are buying – chances are they have only seen it for a few minutes before then. Yet the listing agent wants to be there to “answer any questions”, and use that as a guise for snooping on the inspector to see if the problems and defects are really that bad. Kudos for being concerned, but uncomfortable buyers are less likely to close escrow.
Because a bidding war feels like hitting the lottery, sellers and their agents get giddy and don’t consider how their demands can turn off buyers, and make them want to pay less, not more.
If you want to sell for top dollar, hire a listing agent who can tactfully include safeguards that don’t cause buyers to go backwards.
Good point, if there are unresolved issues with the HOA. it could be a nightmare for the new owner.
“… sellers and their agents get giddy and don’t consider how their demands can turn off buyers, and make them want to pay less, not more.” -JtR
I found a house (out of CA) the 1st day it hit the market back in late 2010. Unfortunately, another couple did too. We both made offers within minutes of each other. I put very few (and very fair) requests of the sellers. Since it was only hours old on the market, I think I offered $5K less
My realtor called me with their counter details and let me know there was another couple who made an offer at the same time.It certainly looked like there would be a bidding war. The sellers came back and pretty much said no to every one of my requests. I decided not to counter.
A couple hours later, my agent called me again. She informed me that the listing agent had called her and said the sellers were incredulous that they hadn’t gotten a counter offer back from me. The listing agent said the other couple who had made their offer were “driving her clients nuts” with their requests and that the sellers had reconsidered and would be “happy” to accept every detail of my original offer–including the price. The listing agent continued pleading with my realtor imploring me to accept.
My agent finally had to explain to her that I had been completely turned off by the sellers’ original counter, and I had “moved on”, and already was looking at other homes.
Those sellers must have been giddy with two offers within the first few hours. Me? All I saw was greed and their house lost all appeal for me. Soon after, I found the perfect home, and 4 1/2 years later, am relieved I didn’t buy that other house.