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Dramatic negotiations while active under contract and in option period

10,471 Views | 107 Replies | Last: 12 days ago by aggiebq03+
Ghost of Bisbee
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AG
In this case, the listing agent acknowledged it by responding that they're "declining" it.
Yesterday
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Ghost of Bisbee said:

In this case, the listing agent acknowledged it by responding that they're "declining" it.


Are they required to read it? Legally?
Absolute
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Another point.

Everyone seems to be operating under the assumption that all inspection reports are created equal. There absolutely are not. Sure we have a SoP in Texas, but even with that there is so much latitude and experience differences. My average report on an older house is 50 to 70 pages. There are still old timers (even older than my 21 years) and maybe newbies who use a pencil to fill out a printout of the trec report and give a 8 page report. Both technically meet the standards requirement.

This is why one should never depend on someone else's inspector. Just like any contractor or professional you hire. You need to find one you think is good and you are confidant about. You have no idea what arranged was made with the report if it isn't yours (it is legal to depart from the standards if both parties agree.)

I believe in honest disclosure. But I absolutely disagree with weaponizing the inspection reports. Whether that is making **** up in the report or trying to coerce the seller by sending the full report for no reason. The report is for the buyers information. The inspector shouldn't care if they deal closes or not. His job is to give a realistic objective opinion of the property conditions at the time of inspection. Then the buyer and their agent decide if the conditions work for them and what they want to negotiate based on the new information and the original offer.

Except for truly hazardous things, why would anyone care about policing future disclosure in a house they decided not to buy? Obviously the governing bodies don't care, or there would be a better method of tracking things.
CS78
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Absolute said:

Except for truly hazardous things, why would anyone care about policing future disclosure in a house they decided not to buy?

Because it allows them a chance to walk away and feel like they are still winning. Realtors tell their clients all kinds of stuff that would be best not said. "spend the money on inspections, you'll get it back in repairs", "the roof looks bad but we wont mention it in the offer, we'll ask for it after inspections."

Then, when the seller doesnt play ball, and the emotions get heated, the buyer and/ or agent feel like that's their only way to walk away but still "win".

We see it all the time on this forum. "that seller wasn't reasonable, we walked away and it sold for even less than our offer, see we won."
P.H. Dexippus
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Some buyers, having learned through the inspection process that the seller's disclosures were materially & knowingly false, and after having spent hundreds to thousands in inspections and options fees, are justifiably peeved to learn that the seller not only is not willing to negotiate in good faith on legitimate issues "discovered", but intends to perpetrate the same fraud on the next buyer by pleading ignorance because they intend to dodge the inspection report(s). I don't think it's "weaponizing" or unmerited "policing" for buyer to expect seller and their agent to receive the full inspection report.
RikkiTikkaTagem
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I get both sides of this. We definitely had a person who made a full price offer on one of our previous homes with no intention of actually paying it. We had like 8 offers on the house, and she made a full price offer with a 2-3week close. We couldnt say no. It was the best offer.

but…. She was a real estate agent, got her inspector to come and view our house, and then proceeded to make a offer at about 80% of her original offer, and then told us she'd make sure we'd have the list everything in the future if we didn't take her offer.

Some of the things she put as her reason for lowering the price were inherently obvious on a basic walk through (it was a 70 year old house) but her inspector worked us over pretty hard.

Still mad about it and if I see her in public, I'll give her a piece of mind politely because her intention from the beginning was to screw us over.

My belief though is that case is rare and when we have dodo, we would provide our buyers with past inspections on the house if there was one just to be clear we weren't hiding anything.

plowboy1065
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S
Things like this is why I don't handle residential any longer and just stick with land
Agilaw
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Too many people think the Buyer agent took the proper action in sending the full inspection report to the Seller's agent. I don't think it is appropriate or being a good, ethical agent/broker to make it a habit of sending an inspection report to the Seller's agent unless the Buyer and Seller agents discuss this in advance and the Seller's agent agrees that sending the report would assist the parties in the transaction. Sending the report unsolicited under any other circumstance is really a passive aggressive act on the part of the Buyer's agent to get a leg up in negotiations - with the ultimate goal of damaging the Seller in the event the Seller doesn't agree to renegotiate the deal to the satisfaction of the Buyer. As a Buyer agent, treat the transaction as you would wish to be treated if you were the Seller agent - and vice versa.
Furlock Bones
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this.
Trucker 96
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Not opening the report isn't right, but the buyer needs to ask for what they want. Onus is on them to propose an amendment with specifics on what they want remediated or $$$ they want to remediate, with the seller holding the right to accept/counter/reject said amendment. 100% BS just to send an inspection report unsolicited
Jason_Roofer
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Red Pear Realty said:

Doesn't really matter if they open the email or not. They've been provided with the information and if you back out, they have to disclose known deficiencies to potential buyers in the future.
I like it. It's funny to me because the agent refused to open the report but in so doing acknowledged receipt of said report.

If I am the buyer, I request a concession of repairing what is wrong and add a little for whatever the inspector missed. I put a deadline on it. I get comfortable with the potential to leave the deal. If they don't comply, I'm walking.
Houston-Austin-Dallas-San Antonio - Infinity Roofing - https://linqapp.com/jason_duke --- JasonDuke@InfinityRoofer.com --- https://infinityrooferjason.blogspot.com/
Diggity
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What I typically try to highlight when asking for repairs is the 1,000 little things that came up in the report that we're not worried about, and that we're not attempting to nickel and dime the seller. In the end, it's up to the client but I always encouraged them to focus on the important items.

I don't see that as weaponizing an inspection report but opinions vary. If the listing agent wants to play some games about not opening the email, that's fine with me. I just care that we get the repairs done (or get compensated for them).
Red Pear Realty
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AG
Ok, here is a real life example that I experienced this last summer while representing a buyer client.

First time buyer client puts a home under contract in the "starter" home category (meaning inspection costs, OM and EM costs, and closing costs are a lot more impactful to buyers in this price point than to those in the luxury segments). This home was in the $300k to $400k price range in Houston. Sellers disclosure is completely clean and left the age of the roof blank. My assumption is that unless what is stated on an SD is bad/wrong, don't believe it. We knew the HVAC system was older going in to it, but the client was willing to take that on as long as it was working properly now.

In between our initial showing and the inspection, the HVAC system goes out and we find out that it's R-22 and probably needs to be replaced as it's ~25 years old. Further, the inspector gauges that the roof is 20-25 years old, which means that it's not insurable and will need to be replaced if my client wants to get insurance for their mortgage. And finally, we find out that although the entire home has recently updated outlets, rockers, and fixtures, nothing is grounded (this is a fire hazard, and no electrician would have done this, meaning it was a DIY special). We went to the seller with an amendment that said we wanted the owner to provide a new roof, new HVAC system, and an electrical system that was properly grounded. He responded by asking for a number instead, so we asked for like $40,000, and he went ballistic, telling us how unreasonable we were being and so on. Oh, and during this time the seller magically found and produced his receipt for the last roof replacement that was like 25 years ago. The sellers agent made it clear that the seller was not going to give anything as "he had already come down during the negotiations" (this one always gets me), so we terminated. I provided the reports we had so that the seller could not hide from these to future prospective buyers like he did with us.

Fast forward about 6 weeks, the house is still for sale, and I get a call from another buyers agent. She asked me why we backed out, so I told her exactly why. I asked if the seller had provided the inspection reports and she said that she was told by the sellers agent that we backed out because we "got cold feet" and that they didn't have any reports. The sellers disclosure had not been updated in the 6 weeks since we terminated. None of that was a mistake, all of it is just plain fraud, and future buyers (likely first time homeowners) shouldn't have to pay thousands of dollars getting into a tar baby because a seller and their agent are liars. I'm going to try and treat people how I would want to be treated, and that includes future buyers.

Moral of the story:

  • People will lie when money is on the line.
  • If you are looking at a home that has previously been under contract, CALL THE BUYERS AGENT AND ASK WHY THEY TERMINATED.
Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear Realty
Diggity
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Red Pear Realty said:

  • If you are looking at a home that has previously been under contract, CALL THE BUYERS AGENT AND ASK WHY THEY TERMINATED.

  • great advice. I'm always amazed more agents don't do this
    Deats99
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    AG
    Why would you accept an incomplete seller's disclosure?
    A good plan violently executed now is better than a perfect plan executed next week.
    -George S Patton
    Diggity
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    AG
    huh?
    Deats99
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    Sellers disclosure is completely clean and left the age of the roof blank.

    On a 20+ year old house this is a red flag right?
    A good plan violently executed now is better than a perfect plan executed next week.
    -George S Patton
    Diggity
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    AG
    I think you meant to respond to Jamie.
    Red Pear Realty
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    Because sometimes you don't have a choice. Also, that's your takeaway from that story?
    Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear Realty
    Deats99
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    AG
    Diggity said:

    I think you meant to respond to Jamie.

    Yep
    A good plan violently executed now is better than a perfect plan executed next week.
    -George S Patton
    Deats99
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    Red Pear Realty said:

    Because sometimes you don't have a choice. Also, that's your takeaway from that story?

    Leaving a blank is a misrepresentation and would allow you as the buyers agent to unwind the transaction at the minimum.
    A good plan violently executed now is better than a perfect plan executed next week.
    -George S Patton
    Red Pear Realty
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    And we did.
    Sponsor Message: We Split Commissions. Full Service Agents in Austin, Bryan-College Station, Dallas-Fort Worth, Houston and San Antonio. Red Pear Realty
    Deats99
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    AG
    Red Pear Realty said:

    And we did.

    With an option refund? ie voidable due to fraud by misrepresentation
    A good plan violently executed now is better than a perfect plan executed next week.
    -George S Patton
    Deats99
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    AG
    Dealing with this now, less than "with it" seller marked "No" all the way down section 1

    We consulted an attorney, I sent the agent pictures of the items from the listing referenced in section one and asked if the would like another chance.
    A good plan violently executed now is better than a perfect plan executed next week.
    -George S Patton
    Gaeilge
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    Stand outside the open house with a free copy of the inspection report.
    Dan Scott
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    AG
    "People will lie when money is on the line."

    Indeed. It's funny psychology but a lot of people wouldn't cheat lie or steal a few hundred dollars but they will when it comes to thousands of dollars. Thousands of dollars are on the line in real estate so don't trust anybody.
    Agilaw
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    AG
    Misrepresentation or fraud in a Texas real estate transaction is not real smart. The common law remedies are strong and the statutory fraud cause of action can be a very strong hammer.
    bam02
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    AG
    Seems to me that has nothing to do with the law going too far but just shows that there are crooked inspectors out there which is another issue.
    Trucker 96
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    The fact so many inspection reports are a phonebook of ticky-tacky bull**** is why this is a bs tactic by the buyers agent. And without the conversation with the inspector, many items on that list can be tough to decipher for a future buyer or their agent as to whether they are a big deal or not. Again, ask for the concessions you want. Negotiate. Just sending the report in anticipation of putting the seller in a jackpot is bullsh. It's a bad faith tactic.
    Trucker 96
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    And fwiw, we sold our first house to a backup offer signed during the option period. Did that backup contract in hand influence my negotiation stance on repairs requested during the first contract's option period? You bet it did. No major issues and didn't play disclosure games, but I also was not going to play ball on the nonsense they wanted.

    I see no issue with showing the house in this situation. The buyer has signaled coming for a big ask and they can walk. The seller would be silly not to still market their house
    Diggity
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    I would disagree.

    bad faith would be communicating to the seller that you were doing the inspections to uncover major issues, then demanding they repair all the little nonsense issues.

    everyone negotiates with their own interests in mind. Just like it was perfectly within your rights to field backup offers, there is nothing "bad faith" about sharing an inspection report.

    And for the record, i love the inspectors on this board....but give me a break with this proprietary nonsense.
    Trucker 96
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    Sharing it while communicating what they are concerned about and why they need more time, I could get. But just dumping it on them, disagree.
    Diggity
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    AG
    seems like we're basically on the same page there
    Trucker 96
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    I also don't mean to knock inspectors. I just think the communication and walk-around that happens with the inspection is incredibly important. The report as a standalone is flawed and using it by itself as an anchor is not a good faith move imo
    CS78
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    Great point on the backup offer. Can be huge in keeping buyers honest.
     
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