Aug 12 2011

We almost walked away from house negotiations


We came very close to walking away from negotiations on the house we’re buying.

We had our house inspection on Saturday, July 30. We put together our response for what we wanted the sellers to do, and gave them until the following Friday to get back to us to give them time to get estimates. We got their response on Friday, and at first, I thought it was covering a lot of things.

But when Shane and I looked at it more closely, we realized it was minimal and it wasn’t going to cover everything we needed to have done. We weren’t going to have the extra money after closing to go and do the repairs that someone already should have completed. We didn’t want to start home ownership by being behind on maintenance.

The sellers needed to increase the amount of money they were crediting toward repairs, or to do more work themselves.

This is where things get complicated and where the emotions ran hot.

All of these back-and-forth negotiations were happening over last weekend when it was harder to get a hold of companies to get estimates and such. The sellers shot back a response that didn’t budge at all, and they were giving us tight deadlines to work with. We thought they were starting to be ridiculous and unreasonable.

Also, they had someone work on the HVAC before we had completed the repair negotiations. It started to seem sketchy.

If they weren’t going to be reasonable about things, we were done. We just couldn’t afford to keep going, even if it meant losing the amount we paid for our inspections (which was around $600 and was a general inspection plus radon, termite and mold. Expensive, but money well spent).

We found out later that the seller’s agent is actually related to them in some way. That should have been disclosed on the MLS just to keep things on the up and up. We also found out that the listing agent was really irritated with his clients because they were going against his direct advice to NOT do any repair work yet — just get estimates. And they also shot back one of their responses without going through him. They just wrote out an addendum and emailed it to our agent. I guess their agent was out of town that weekend or something and they were getting hasty.

I seriously think if they had just listened to their realtor, we wouldn’t have had the drama we were having.

Shane and I were amazed at how quickly we had gone from wanting to buy the house, to wanting to be done with it. House buying is emotional even if you don’t want it to be.

We put together one last response, basically so we could get our earnest money back if they said ‘no’ to our demands. We couldn’t completely walk away without one last response and still get to keep our earnest deposit, based on how our previous responses were worded (they didn’t have price figures in the earlier ones).

So. We asked for money and backed up why we needed it. Our inspector said these things needed done, and we wanted them done. We didn’t think we were being unreasonable about it.

We sent them our response and waited. We gave them a few days to show our goodwill and to give them more time to come up with estimates or more money. Maybe their realtor relative could kick back part of his commission or something to close the deal.

(Speaking of realtor kickbacks, we’re getting $1,000 from our realtor at closing, to be applied toward our closing costs. I like that we’re getting part of her commission. Not all agencies do this, so check around!)

While we were waiting for their response, we drove past some other houses for sale that maybe we could go see once we got our earnest money back. There were two houses for sale that we wanted to at least tour, but after seeing one neighborhood we were like “meh” and the other one was ok, but it didn’t seem like it was what we were really seeking. So that part was discouraging — if this house deal fell apart, we really would be back to square one and probably would have to wait awhile before finding something that would work for us.

Combine that with this cruddy apartment we’re in, and I was just feeling really drained by all of it.

Also, we were wondering if maybe WE were the ones being unreasonable…asking for everything on the inspector’s list to be done. We weren’t sure if we’d run into the same issue with another seller — certain repairs needed done but the seller was unable or unwilling to do that.

Still, we knew we had to do what was best for our family, and that meant getting a house that was caught up on all maintenance and repair issues, or getting a house that was priced according to the work it still needed.

We did hear back from the sellers in the 11th hour, and we were surprised and happy to discover that they were willing to give us a credit at closing to cover the work remaining. They attached estimates to back up their dollar amount.

We thought their latest response was reasonable and something we could work with, and accepted.

The sellers saw that we were serious about walking. Maybe they realized that they’d have to do these things to appease the next buyer to come along (whenever that might be) and probably drop the price to attract more buyers, so it would still be better to work it out with us rather than re-list the house.

They saw we had canceled the appraisal. They heard from their realtor that this was where we were at. I told our realtor to let them know that we really didn’t have the extra money to throw at those repairs. Maybe they thought we had more to spare, since they knew we were putting 20% down. We don’t. I’m not using our emergency fund to do things that the seller should have done.

I learned that you have got to be serious about walking away from house negotiations if you see that things are not going to work out in your best interest. If the inspection turns up crazy things, walk away. If the inspection shows things that you simply can’t afford in a reasonable amount of time, walk. Yes, it stinks to lose your inspection fee and to start all over. But if you are paying too much for a house that needs too much work, that’s way more expensive in the long run.

If we had acted like we were desperate to get into the house at all costs and had emotionally moved into the house already, we would have had to accept their lower offer and come up with the extra money for repairs ourselves. Being willing to walk saved us money.

We’re still set to close in three weeks. Up next is the appraisal.

I really appreciate and respect how Shane handled all of this crazy stuff. He’s so level-headed and I’m glad he’s my husband!

Have you ever walked away from house negotiations, or come close to it? Have you lost a potential buyer during negotiations?

Posted under Uncategorized | 5 Comments »

5 Responses to “We almost walked away from house negotiations”

  1. I had a deal nearly fall thru on Christmas Eve. The seller was a realtor and was holding out not wanting to make repairs. In the background My Agent and I could hear his wife saying “FOR XXXXXX Sake just do the REPAIRS!” I got my house in PERFECT condition. It’s very, very hard to walk away, but then you realize that most houses in the Indy area are mass produced. There’s another one out there just as nice or nicer in a neighborhood you will like. But it stinks to go back to square one. Good that you held your ground though. It’s totally a buyers market and sellers need to remember that.

  2. We walked away from the first house we put an offer on when we learned there were three pedophiles living on the block. Um, no thanks! We should have checked earlier but had gotten wrapped up in the emotion of the whole thing. We were lucky though because their bank was acting really fishy and so we managed to get our earnest money back. When we prayed about it we knew we had to go. I think we dodged a bullet and it turns out the second house was perfect for us!

  3. Way to go sticking to your personal goals!
    My husband always says that when you are in an argument…if you are right and are respectful in the way you conduct yourself…eventually it will work in your favor. Usually those that are bullyish (for lack of a better word) will give in once they see you are reasonable and sound in your stance and theirs is not!
    Good job in doing what was best for your family!

  4. YIKES! No thanks, pedophile neighbors. There aren’t any with a record in our new neighborhood and since we are so close to schools that might help keep them away. I don’t know how far away they have to be from schools, though.

  5. I completely understand both sides when it comes to buying and selling. We recently sold our apartment. The biggest let down we had was when a buyer came along with ‘pre approval’, but had absolutely no deposit and was not willing to use the equity in her existing home to get the loan. At that point we were also with a different solicitor which we now realise were not thorough and weren’t working for us. The buyer got their deposit back, and we were left feeling wrecked. It’s emotional, no matter which side you are on. Then when we finally sold, the buyer tried to get out of 2 days before settlement (well after the cooling off period and the contract had gone unconditional), stating that the carpark was not listed on the building plan-even though it was. At that point we were ready to take legal action, especially as we had already moved out. Luckily they pulled themselves together, realised the financial and legal minefield they were about to put themselves in if they pulled out, and went ahead. However, having driven past many times and speaking to old neighbours, the buyer doesn’t even own a car!!! We realise now they probably just wanted out, or may have seen another property they preferred. I think, as long as everyone is courteous and reasonable, there should be no problems. However, in our experience, it was traumatic, and went to a point we never would have expected.

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Hey! I'm Kacie, wife and mother of 3. I write about my family's finance: how we save money, improve our spending, and plan for the future.

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