Author Topic: Experience as Seller with credit vs reducing price? (Real Estate)  (Read 1365 times)

engineerjourney

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I would usually post this in the real estate section but it doesn't seem to get as much attention and I would appreciate some input quickly as we are trying to send back our counter today. 

Info:  Selling 2nd home (yay yay yay), agreed to price with buyer with all disclosures plus additional info from previous home inspection from a deal that didn't go through. 

Disclosed that a radon mitigation system would be installed before closing.  In discussions with radon company they recommended a vapor barrier instead of a traditional mitigation system due to nature of open earth in basement and being barely over the 4.0 limit during inspection.  We asked our realtor if the buyer wanted us to go ahead and do the untraditional method or just give them the $$ to do it themselves.  Their home inspector recommended a concrete floor to seal the open earth which costs more than the options the radon company gave us.  Due to that, and a couple other minor things, they are asking for a $5,000 credit.  We aren't willing to give up that much as the original cost to us would only have been $1,200 and we are already "loosing" money on the sale (and the radon company's job is radon while the home inspectors is not).  Our realtor recommended countering with a reduced credit.   BUT I also wonder, wouldn't it make more sense to just take the $$ off the selling price?  We have to pay a 1% transfer tax in CT and the 5% realtor cost is also based on sale price.  I don't believe our buyers are strapped for cash so if it doesn't matter to them, why would we do a credit over a reduction in sales price? 

I did use google but most of that was from the buyer perspective.  Would appreciate any input.  I don't think the deal is in jeopardy but it also could be less stressful just to do a credit since that is what they asked for to begin with.   

ketchup

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Re: Experience as Seller with credit vs reducing price? (Real Estate)
« Reply #1 on: December 06, 2016, 10:52:15 AM »
This is a bit of a cynical assumption, but the realtor probably recommends that because their commission is based on the sale price.

Jon Bon

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Re: Experience as Seller with credit vs reducing price? (Real Estate)
« Reply #2 on: December 06, 2016, 12:03:51 PM »
Engineer,

Personally I think radon is overblown and so often used by realtors to reneg on contracts and put the squeeze on sellers. (ask me how I know!)

So not exactly sure I follow your situation but my concern would not be the money, but if changing the asking price/cash at closing would require any sort of re-work by the lender. This would push the deal back and be a pain for everyone. So I would most definitely talk to the title agency, they are the ones who are doing the heavy lifting and would know if you are crediting them too much back, etc.  I don't think credit versus reducing the selling prices makes much difference, unless it requires new paperwork.

$1,200 for the system feels fair, bump it it to $2,000-2,500 and I bet they would take the deal.

To comment on Ketchup, the realtors commission on a few thousand dollars I don't think makes much different in the deal. If the deal was good enough for the realtor at price X, it will be good enough at price X-5,000.


engineerjourney

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Re: Experience as Seller with credit vs reducing price? (Real Estate)
« Reply #3 on: December 06, 2016, 01:52:40 PM »
Thanks Ketchup and Jon Bon.  More things to think about.  I will definitely ask how the delivery would affect anything with the lender/title companies and see if that makes us lean one way or the other.

vivophoenix

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Re: Experience as Seller with credit vs reducing price? (Real Estate)
« Reply #4 on: December 06, 2016, 03:47:31 PM »
i am going through something similar.

the reason the realtors pushes closing credits is because this means that the buyers do not have to put as much cash down for closing( thus putting cash in their pockets to buy furniture, hence it is a people pleaser), while the seller just agrees to take less money during the sale.


reducing the selling price by the $5000, means the buyer takes out a smaller loan, but the closing costs do not change, but the seller still loses out on $5000.

so a credit means $5000 cash today in hand vs lower price means smaller loan.




means nothing to you or the realtor.


it doesnt sound like you strapped for cash, but you are fighting against giving $5000, so why assume the buyers arent fighting for it ?
« Last Edit: December 06, 2016, 03:57:21 PM by vivophoenix »