WHAT TO EXPECT AFTER YOU’VE PUT A HOUSE UNDER CONTRACT:
So you thought the stress and work was over when you found the house? The true work starts as soon as you've got it under contract. Below is some insight to help you with the process...
Normal: Buyer to pay for a structural and mechanical inspection and also a Wood Destroying Insect Inspection. If needed per inspection report suggestions: A plumbing (hysdrostatic) inspection, Environmental (Mold or other hazards) Inspection, foundation inspection, Roof Inspection, HVAC inspection
Not Common: to perform all of these inspections at once.
Normal: 7-10 day option period
Not Normal: Option period longer than 12 days. Also uncommon to increase the option period for a period of over 2 weeks. In residential transactions, option periods are short (averaging 7-12 days) so that the seller does not risk having the property off the market for a long period of time. The option fee is paid by the buyer and gives the buyer the option to inspect and/or back out of the deal during that period and only lose the option fee. The Earnest Money does not go to the seller if the buyer opts out during the option period.
Normal Buyer Responsibilities: secure estimates for repairs, secure insurance, provide title company with lender and insurance information, keep in touch with lender throughout process. In today’s market communication with your lender is very important because there is a lot that they need from you aside from a few short answers over the phone.
Not Normal: Contacting the seller directly (unless requested), meeting with a repair man at the property without your agent, asking your agent to line up contractors and meet them without you.
Normal: Visiting the house a few times after you put it under contract -- inspections, showing friends/family, taking measurements, getting estimates, final walk-through before closing
Not Normal: wanting to go more than 5 times – excessive unless you have a good or personal relationship with the seller and they have extended invitations.
Normal Exclusions: Sometimes the seller will exclude (in the contract) washer, dryer, curtains, moveable kitchen islands, a chandelier or refrigerator. It is best for a buyer to address things that they want as a part of the contract with a Non-Realty Items Addendum prepared by the agent.
Not Normal: It is not normal for a seller to exlude things like curtain rods, ceiling fans, built-in appliances or freestanding ranges, curtains made-to-fit a specific window, paint cans that match colors.
***Agents should specifically address any exclusions as a contract is being negotiated and before everyone signs.+++
Normal: Negotating repairs or a credit from the seller. This change is made with an Amendment to the Contract signed by seller and buyer.
This can be applied in 3 different ways:
1. Seller pays a contractor to repair
2. Reduction in sales price
3. Seller’s Credit to Buyer’s closing costs. There is a blank space for this amount in section 12. A 1. B of the 1-4 Family Residential Contract formulated by TREC.
I prefer option 2 or 3 because it avoids buyer conflict with seller obligations.
Every negotiation is different. If a buyer pressures a seller and squeezes them into losing money to put it under contract, you can expect that the seller will not be generous in offering repair credits. In most houses, my buyers get an average of around $1000 for repair costs for a house selling for $200,000-400,000. In a house selling for $3,000,000 I have seen repair credits ranging anywhere from $1000-50,000! Again, every negotiation and sale is circumstantial and different.
Not Normal: Expecting that the seller repair or pay for every problem on the inspection report. This is unrealistic unless it is new construction and you're purchasing from a builder.
A good agent will specifically guide you through this process when you find the right property. Please feel free to contact me with any questions.