Author Topic: First Time Homebuyer - Difficult Sellers  (Read 9815 times)

hoyahoyasaxa

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First Time Homebuyer - Difficult Sellers
« on: March 25, 2014, 02:30:41 PM »
Hi all,

My wife and I are first time homebuyers and had our offer accepted a few weeks ago on a house.  We were fairly confident the market value on the house was between 240-250k (although the sellers had it on the market for $279k, they had bought it only two years earlier for $210k) - we offered 235k and were promptly rejected, so we sat quiet for about a month until they came back to us willing to negotiate.  We settled at 246k.

Last week we had the inspection which found a generally good house, but there were a few issues needing attention.  Primary of these was that the inspector found a few spots of inactive termite damage in the attic.  Our realtor advised us that the owners would have to get this taken care of because a bank wouldn't give us a loan if there was termite damage in the house.  Other issues that we included in the contingency list were a number of older floor tiles in the laundry room that likely had asbestos in them were cracked or broken, a number of the windows were older and had cracks, there was a small bit of wood rot in the detached garage, the outlets next to the sink in the kitchen were not GFCI outlets, etc.

We sent this list to our realtor and asked the owners to have these issues taken care of.  They proceeded to not work with their realtor (I think they are still mad that she talked them into coming down so much on the price of the home, even though that is what the home is worth) and instead involve their attorney to negotiate going further.  I just got off the phone with the attorney who we were using (and whom our realtor recommended) and he seemed to be pushing back on me a lot on some of these issues, namely the asbestos floor tiles.  He was saying things like "they're just going to get pissed off if you tell them to get a lab analysis done of the scrapings of the broken tile" and when I suggested that they could simply layer over the broken tiles he responded "but they're older tiles - how are they going to match them?"

Basically, it seems to me that his MO is that he's getting paid a flat fee of $750 regardless of whether he goes back and forth with the other attorney or just puts together a simple contract so he doesn't want a long drawn out process.

Are there others here who have experience with home buying (or who simply know about homes) who can provide some advice on the issues that we brought up, whether we should just drop them, or what we might be looking to expect going forward?

4alpacas

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Re: First Time Homebuyer - Difficult Sellers
« Reply #1 on: March 25, 2014, 02:40:06 PM »
Asbestos?  Termite damage?  I would run!   

Maybe I'm too cautious...

hoyahoyasaxa

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Re: First Time Homebuyer - Difficult Sellers
« Reply #2 on: March 25, 2014, 02:44:08 PM »
I'm not that concerned about the asbestos.  Tiles from that time period *could* be asbestos tiles and a pretty typical solution is to layer over them.  The termite damage is very very minimal (a few areas of an inch or two with inactive termite marks in the unfinished attic) but of course we don't want to be buying a house that has termites which is why we're asking for the termite inspection and treatment.  Can anyone confirm what our realtor said - that they are required to get a termite inspection and treatment if termite damage is found because new owners won't be able to get a mortgage if termite damage is included in the report on the house?

szmaine

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Re: First Time Homebuyer - Difficult Sellers
« Reply #3 on: March 25, 2014, 02:45:52 PM »
I negotiated another 10k off my house after the inspection due to various issues...including asbestos (pipe insulation in my case).
The problem with asbestos is that once they know that it's asbestos ( if it is) then they'll have to disclose that to other potential buyers...some people are so freaked out by asbestos that selling will be harder if you don't take it...if they just refuse to do these things then they do not have to disclose anything to other buyers. I'd negotiate for further reduction based on what it will cost you to fix it.
No idea about the termite issue.

seattlecyclone

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Re: First Time Homebuyer - Difficult Sellers
« Reply #4 on: March 25, 2014, 02:47:11 PM »
It's a negotiation. You previously agreed on a price, with the option to walk if the inspection revealed significant defects. You're within your rights to demand these issues get fixed as a condition of your purchase, but they're within their rights to decline and seek a more agreeable buyer. If you can't meet somewhere in the middle, the deal will fall through. It's that simple. So your attorney is probably perfectly right to suggest you consider dropping some of the issues if that means the sellers will fix the rest. It's in his interest to get the deal resolved quickly, that's true. But now that you've sunk some costs into a home inspection and attorney's fees, it might be in your interest to budge a little bit so you don't have to repeat all this with another house.

skunkfunk

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Re: First Time Homebuyer - Difficult Sellers
« Reply #5 on: March 25, 2014, 02:48:47 PM »
I say GTFO. I'm not saying the house is a lost cause by any means, I just get the feeling that these sellers don't really want to sell. In my limited experience, if the sellers are real assholes, you won't ever reach a favorable arrangement. Don't let a little sunk money rope you into a bad deal.

ChiStache

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Re: First Time Homebuyer - Difficult Sellers
« Reply #6 on: March 25, 2014, 03:01:34 PM »
I can relate to this post. I won't recount my whole closing saga here (120 year old house, lots of deferred maintenance, lots of negotiation following inspection, stupidly unresponsive sellers). I'll just offer this advice. These do not sound like deal-breaker issues to me. If the termite damage is going to hold up the mortgage insist that they get that fixed. For the other issues, I'd be cautious about insisting that your sellers fix things because they are likely to do a half-ass job or just make things worse. Think about it: they have no incentive to make sure that the repairs are done well. They are going to do the bare minimum to get you off their backs. Instead, I would get an estimate of your own from a reputable contractor and then ask them to split the cost of repair with you. That way, you can see that the work is done correctly and hopefully avoid a bunch of pointless back-and-forth.

Good luck!

Frankies Girl

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Re: First Time Homebuyer - Difficult Sellers
« Reply #7 on: March 25, 2014, 03:02:20 PM »
Asbestos flooring was waaaaay common up through the 80s. I honestly wouldn't worry about it myself, but it could be an issue if you're planning on ripping out the floor (you'll need someone with proper equipment to remove properly). I was told if it is older than the 80s, then assume it is asbestos and act accordingly. 

Old termite damage... I don't know about. I'd want to see a record of when they've had their last treatment for termites and something showing that it isn't structurally unsound, and if both of those checked, I'd probably just ask them to knock off a little more and repair it myself later down the line (if it's cosmetic). Structural damage (and lack of any records indicating they were taking care of termites ongoing) would be a dealbreaker for me.

When I bought my current house, the realtor handled all the back and forth with the seller. We asked for things to be fixed, the realtor relayed those requests, and they fixed them. Not sure why you have a lawyer involved? If the house offer was accepted but you have an out (contingent on them fixing everything you found in the inspection) they can make a counter to fix certain things, but if they're lawyering up, that's a bad sign.

The sellers being weird about using their own realtor is also a sign that it might be more trouble than it's worth. I would request that they fix the damage, get treatment (or show proof of treatment) and fix any of the other issues that bother you, lower the price by X amount (that you feel comfortable with) or the deal is off.

And your realtor should be telling you the truth about not being able to get a mortgage for termite damage, but they may mean that  if it has damage and doesn't show it was properly taken care of - active infestation or no report of ongoing treatment - otherwise that would mean a shit-ton of houses that had termite damage at any time could never be sold again... which is silly because termites happen. So I would ask the realtor to clarify that part, and confirm it yourself through a mortgage lender.


Cpa Cat

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Re: First Time Homebuyer - Difficult Sellers
« Reply #8 on: March 25, 2014, 03:03:25 PM »
You have three options for responses:

"Well, they're going to have to disclose the asbestos and termites to any other potential buyers. Please wish them the best of luck with that. Let them know that I will be resuming my home search in 2 days if they're not willing to deal with these issues."

"I really love this house. So I guess I'll eat the costs and repair it myself."

"We can drop the asbestos, but you need to get the termite inspection."

Bear in mind, if the sellers feel they've made a "bad deal," they're going to be jerks right up until you get the keys in your hands.


TrMama

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Re: First Time Homebuyer - Difficult Sellers
« Reply #9 on: March 25, 2014, 03:10:55 PM »
I can relate to this post. I won't recount my whole closing saga here (120 year old house, lots of deferred maintenance, lots of negotiation following inspection, stupidly unresponsive sellers). I'll just offer this advice. These do not sound like deal-breaker issues to me. If the termite damage is going to hold up the mortgage insist that they get that fixed. For the other issues, I'd be cautious about insisting that your sellers fix things because they are likely to do a half-ass job or just make things worse. Think about it: they have no incentive to make sure that the repairs are done well. They are going to do the bare minimum to get you off their backs. Instead, I would get an estimate of your own from a reputable contractor and then ask them to split the cost of repair with you. That way, you can see that the work is done correctly and hopefully avoid a bunch of pointless back-and-forth.

Good luck!

^^^This is what I was going to suggest.

Find out for sure about whether the termite damage will hold up the mortgage. If it is going to prevent you from getting your mortgage, tell the sellers that. As in, get this fixed or I cannot buy your house.

And ditto what ChiStache said about making sure you are responsible for fixing all defects (this applies to the termite stuff too if the mortgage isn't a factor). I've been on both sides of this equation and there's absolutely no way I want the seller "fixing" anything. I want to know the work was done properly and wasn't just a quick patch job. Goodness knows that what I did when I was the seller.

In terms of negotiation, I've had good luck with saying something along the lines of, "Your house has a, b and c problems. I'm willing to pay you X for it. Take it or leave it." The seller usually has a hissy fit. That's their problem.

If they cave, you've bought a house for a fair price. If they don't cave, you haven't overspent and won't regret your purchase. There are millions of houses out there. You can always pick another one. During negotiations you need to have ice water in your veins.

Thegoblinchief

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Re: First Time Homebuyer - Difficult Sellers
« Reply #10 on: March 25, 2014, 03:31:18 PM »
The only thing I'd focus on are the termites.

Everything else I'd fix myself or ask them for a 50-50 discount towards fixing it.

the fixer

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Re: First Time Homebuyer - Difficult Sellers
« Reply #11 on: March 25, 2014, 03:50:32 PM »
Bear in mind, if the sellers feel they've made a "bad deal," they're going to be jerks right up until you get the keys in your hands.
That's your problem right there, basically. They don't really want to sell for the price you negotiated, even though it sounds to me like a fair price, remember that they have to pay a 6% commission and presumably paid some upkeep. At best, they're only left with a $15-20k profit. These issues are making a bad deal for them even worse.

I don't know this first-hand, but I've heard that you can't easily negotiate the selling price down based on deferred maintenance. The sellers coming way down on price is a huge red flag for mortgage lenders. They'll know something is wrong with the property and refuse to lend on it unless the issues are fixed first. So even if they did cooperate, your lender might not. At least that's what an agent told me.

Numbers Man

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Re: First Time Homebuyer - Difficult Sellers
« Reply #12 on: March 25, 2014, 04:10:30 PM »
You're not buying a new home. So there's going to be wear and tear on the house. I would call that inspector and ask him to describe to you in English what inactive termite damage means. For example, is there structural damage or is it cosmetic. If it's structural than have the homeowner cure that defect or walk away from the deal if he can't. As far as the tiles in the laundry room, how many square feet can it possible be? 30 feet?Ask for a couple of bucks to replace the tiles on your own. As far as the broken windows, have them give you a couple of bucks to fix the window. I'm not an expert on wood rot, but ask your inspector if this can be fixed for a reasonable cost or do you really need new windows.

I'm sure you have toured some other houses in the neighborhood. Is this the cream of the crop? Or are you buying a fixer upper to put some sweat equity into the place.

Cassie

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Re: First Time Homebuyer - Difficult Sellers
« Reply #13 on: March 25, 2014, 04:11:23 PM »
I have bought & sold many homes through out my life.  Typically the offer states how much the homeowners will pay in repairs if needed-usually 500-$1000. Now if the inspection shows a lot more is needed the buyer can ask the seller to split it, take it all off the purchase price or walk away.   Once as a seller we agreed to up to $1000 if needed but after the inspection the new owners kept coming back for more. Finally we gave them $1500 and said that was it-take it or we would put back on market-they took it.  Once when we were trying to buy the seller was unreasonable and thought we would never walk. After about a month of screwing around we walked. Do not waste too much time in this type of situation.  If you are paying full market value which it appears you are at least have them split the cost with you. If they won't I would walk.  You may find a house you like better:))

Blindsquirrel

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Re: First Time Homebuyer - Difficult Sellers
« Reply #14 on: March 25, 2014, 04:24:07 PM »
   I would walk unless you are absolutely head over heels in love with the house. Where you live can have emotional components that can blind you to the facts that the house has some stuff wrong. It is a huge chunk of cash and letting your emotions rule at that time can really make you commit a financial error.
1. The house is "fairly priced" where you are at price wise. Bugger that! You want a steal of a house, why pay retail.
2. No foreclosures in the area? You are paying retail on a house. We have purchased 20 houses over the years and we paid retail for 2 of them. I consider both my worst deals.
3. They are being a pain in the a$$. How long has the house been on the market? I doubt they are overwhelmed with offers and they really do not want to sell at that price.  Banks/short sales are where you get motivated non retail sellers, which is what you want.
4. Unless you are dying to move into the house, I would ask them to fix all that you want fixed on the list you want or they can keep the house.

Milspecstache

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Re: First Time Homebuyer - Difficult Sellers
« Reply #15 on: March 25, 2014, 04:31:18 PM »
I have bought a house with inactive termite damage as it didn't bother me too much.  Not structural just cosmetic.  The only problem is if you plan on selling it anytime in the future as it will be required to be disclosed and future buyers will have the same reaction that you have now.  The termite damage didn't affect my ability to get a loan.

If it is cosmetic, still better to get it fixed, either now or after you buy it.  Then you won't have an oustanding issue.

waltworks

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Re: First Time Homebuyer - Difficult Sellers
« Reply #16 on: March 25, 2014, 04:34:48 PM »
They are willing to negotiate, and if they have sold RE before they know the drill - the inspection will almost always result in at least some negotiation over repairs. If they have never sold a home before, that might result in some denial of reality, but the price *almost always* changes after the initial offer is agreed to. Just the way it works.

-Ask for money, not repairs! That way, you can prioritize the repairs and make sure they're done by YOUR contractor (or you) and done right.
-Don't worry about your inspection costs, forget you've paid for the inspection and treat it as a sunk cost. If the damage is enough that you need to get $5k to fix it, that is what you need to negotiate for - not accept a bad deal because you already paid $400 or whatever for the inspection.
-The sellers are pretty desperate if they *came to you* to restart negotiations. You can get them to agree to pay for most/all of the problems. Seriously. They have more to lose than you. Buyers are really in the driver's seat on these kind of deals (at least in the US) so use your leverage. If they won't play ball, move on to something else.

-W

SnackDog

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Re: First Time Homebuyer - Difficult Sellers
« Reply #17 on: March 25, 2014, 04:37:48 PM »
Sellers usually hate organizing repairs.  If they liked doing them, they'd have done them already.  Unless dealing with a builder, I typically ask for a reduction in the agreed price to address the deficiencies on the inspection which I consider critical.  It is helpful if the inspection includes an estimate of the cost to remediate each item.  If they don't like the reduction, we negotiate.  I once suggested a reduction of $40,000 on a house which was really a mess.  The owner was outraged!  We walked happily away.  The house, with our inspection details, was for sale for another two years as the market spiraled downward. He finally sold it for nearly $200,000 less than I had offered. 

In retrospect we dodged a bullet as that house had significant issues which we would have struggled to address; a $40,000 adjustment was all I could ask for with a straight face. So glad he balked.

Mega

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Re: First Time Homebuyer - Difficult Sellers
« Reply #18 on: March 25, 2014, 05:23:32 PM »
My current house has those "likely asbestos" tiles. That is not a big deal unless you think it is a big deal. Just use some sealant to keep the stuff immobile, or leave it alone altogether.

What you need to worry about is the termite damage you can't see. Is there structural damage behind the walls? Could there still be active termites? Why are they selling the house (e.g. What do THEY know that you don't)?

The fact that they involved their lawyer is an enormous red flag. Stay as far away from this a possible... They are worried about their LIABILITY for selling you this house.


Cassie

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Re: First Time Homebuyer - Difficult Sellers
« Reply #19 on: March 25, 2014, 05:36:02 PM »
In some states it is typical and not unusual for a lawyer to handle the paperwork. It really depends if the buyer lives in that type of state.

hoyahoyasaxa

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Re: First Time Homebuyer - Difficult Sellers
« Reply #20 on: March 25, 2014, 05:36:34 PM »
Thank you all for your replies, some of which are very helpful.  We absolutely do want this house.  We have a limited budget, and houses are extraordinarily hard to come by in this area for this price (and this is the area we want to be in, as it's near our family and a 10 minute commute from a job I just got).  As I mentioned before, the asbestos thing is not as much of a big deal for me - we may just go the route of asking them for a credit towards fixing up those broken tiles.  The termite thing is where I feel we need to hold our ground.  As a number of you mentioned, I'm not super concerned that it's going to be a major issue - it was a small patch of marks in a couple places in the attic and was not structural.  The issue is that we can't know the extent of the termite issue without an inspection and I'm not going to pay $246k for a house that might have termite issues.  And based on what our realtor said, the bank will not give a mortgage if the inspector noted termite damage in the inspection report, which he did - there needs to be a clean termite report before they will issue a mortgage.

So perhaps it would be easiest on everybody if we go to the attorney tomorrow and say we'll give in on the more cosmetic issues of the few cracked windows, small bit of rot in the garage and outlets in the kitchen if they will give us a credit towards fixing the cracked  possible asbestos tiles in the laundry room and provide for a termite inspection and treatment if necessary.

TrMama

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Re: First Time Homebuyer - Difficult Sellers
« Reply #21 on: March 25, 2014, 05:47:39 PM »
Do yourself a favor and call the bank about the termite/mortgage issue. Find out if it's a real issue, or if your realtor is blowing smoke.

Of all the things I've learned while buying and selling, the most important is to always, always confirm what your realtor and lawyer have told you. Always.

This small task will take 5 min and could save you thousands.

Spork

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Re: First Time Homebuyer - Difficult Sellers
« Reply #22 on: March 25, 2014, 05:58:37 PM »
I have bought a house with inactive termite damage as it didn't bother me too much.  Not structural just cosmetic.  The only problem is if you plan on selling it anytime in the future as it will be required to be disclosed and future buyers will have the same reaction that you have now.  The termite damage didn't affect my ability to get a loan.

If it is cosmetic, still better to get it fixed, either now or after you buy it.  Then you won't have an oustanding issue.

I bought one with inactive damage, too. 

In my case I found:
1.  they didn't fully repair it.  I found it in later remodels and did the repair myself.
2.  inactive damage leaves pheromones.  It's very likely to get future damage in the same location(s).  This isn't a deal breaker.  But it's a reminder to be vigilant in watching areas that have had previous damage.  (This applies to subterranean termites... I know there are multiple kinds and I don't know if all of them act this way.)

Again: I wouldn't run necessarily because of this... but something to keep in mind. 

Ellen

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Re: First Time Homebuyer - Difficult Sellers
« Reply #23 on: March 25, 2014, 06:04:28 PM »
Not sure where you live, but where I am (coastal CA), there are very few houses without termite issues. We live in a mild coastal climate that is popular with both termites and people. When we bought our first house 15 years ago, one of OUR inspectors told us that termites in our town were more of an ongoing maintenance issue than something to freak out about. There are different types of termites, though

As far as any asbestos tiles being replaced, I'd take care of that yourselves. As an earlier poster pointed out, the seller has very little incentive to do a good job with this.

SwordGuy

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Re: First Time Homebuyer - Difficult Sellers
« Reply #24 on: March 25, 2014, 06:27:48 PM »
Sellers usually hate organizing repairs.  If they liked doing them, they'd have done them already.  Unless dealing with a builder, I typically ask for a reduction in the agreed price to address the deficiencies on the inspection which I consider critical. 

This! 

You want cash off the price of the house to fix it yourself.  Simple for the seller, simple for you.

And simple wear and tear items are part of buying an older house, so don't be a problem buyer. :)

the fixer

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Re: First Time Homebuyer - Difficult Sellers
« Reply #25 on: March 25, 2014, 10:04:38 PM »
And based on what our realtor said, the bank will not give a mortgage if the inspector noted termite damage in the inspection report, which he did - there needs to be a clean termite report before they will issue a mortgage.
That's exactly what you use in negotiation. Don't make yourself the bad guy. Blame a third party and work with the seller to hammer out an agreement that will make the deal happen.

fixer-upper

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Re: First Time Homebuyer - Difficult Sellers
« Reply #26 on: March 25, 2014, 10:42:10 PM »
Imagine selling a car and the buyer asks for his mechanic to do an inspection before finalizing the purchase.

As the seller, would you be grouchy if the buyer came back demanding that you order new floor mats because the mechanic noticed some cracks in the rubber? 

When negotiating a deal, it always helps to put yourself in the seller's shoes.  They likely consider you a nitpicky PITA.

Saying something like "the floor mats are in rougher shape than I thought, can you knock a few bucks off to help me replace them?" comes across much better.

« Last Edit: March 25, 2014, 11:16:11 PM by fixer-upper »

escolegrove

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Re: First Time Homebuyer - Difficult Sellers
« Reply #27 on: March 25, 2014, 11:32:11 PM »
We are buy and hold real estate investors so I have bought 9 houses in the last 2 years and sold 1. Personally if I was the seller I would walk! My parents buyer was the same way you were and we almost walked. We took a lower price with the agreement that the house was AS IS, it was older and the price  reflected it. The other issue, is if you come across difficult they might not be willing to grant you any leniency.

The seller believes they are giving you a good deal. If the house is in a great area they might walk. The issues you are talking about, are honestly old age. Personally that is what gets you in to this area, at the price. Just my thoughts.