Author Topic: Seller's perspective on a buyer's inspection report demanding credits  (Read 2038 times)

jeromedawg

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Hey all,

So finally got the buyer's inspection report back as we are getting close to the contingency removal date and wanted to get your thoughts on it:



Their demands are as follows:

Quote
1. Items on Page 1 (Summary Page) of home inspection report attached (dated 8/26/2020 by Elite Group)
except Page 57 Item 6 Water Pressure.
Or
2.Seller credit Buyer $500 for Page 15 Item 11 regarding Closets AND repair the rest items mentioned
above.

The closet request is a bit of a stretch IMHO, as it's clear that in the den area closet doors were never installed in the first place:

- there isn't a track there and there were no prior hinges. It's just an open recessed space, so a bit puzzling that the inspector would call that out. EDIT: actually, there was an 'opening' on an adjacent wall of this den that opened up into the living room. I had closed this up years ago, so perhaps it's because of that? I'm in California so not sure if building code *requires* that a room have closet doors in order to be considered a true bedroom? Either way, not sure what to make of that.


The other items I'm not so sure about. Never had to deal with this before so not quite sure how to navigate or proceed. Usually do you just concede to giving a rough credit for repairs? Is DIYing any of it allowed? Hahaha... 

« Last Edit: August 29, 2020, 12:01:40 AM by jeromedawg »

secondcor521

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #1 on: August 29, 2020, 12:08:50 AM »
If you're capable of DIY to the level of quality required, then sure.

As for the rest of it, it's all negotiation.  In my state, there is a standard clause in there about home inspections and that the seller will make repairs not to exceed $X, where $X is specified by the buyer on the contract template.  I once sold a home and the buyer found a few minor things and wanted us to pay $X to fix them.  We thought they were being unreasonable on some of the items and told them to pound sand.  We pointed out that we would pay for repairs not to exceed $X meant $X was a maximum limit, not a guarantee.  IIRC the buyer grumbled and then gave in.

But it all depends...do you have other offers in the fire?  How badly do they want the house?  Have they been a difficult counterparty thus far or mostly reasonable?  Etc.

What I would suggest is to do what you think is reasonable.  Most people, if you give them a reasonable explanation to why you will or won't do something, will go along with it.  So it sounds like you think the closet doors are unreasonable, so don't do those.  If there are things in the inspection report that you think are reasonable (like the GFCIs, those sound reasonable) and are willing to fix, it'd probably go a long way to give them a partial victory and fix those.

Finally, if you have an agent on your side of the transaction (or maybe if they have one on their side), you can talk to them - they'll have a rolodex full of handymen who can come in and take care of small stuff like that probably quickly and for very little coin.  It can often be easier and more efficient to go through them than to try to find your own contractors or servicepeople on short notice.

jeromedawg

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #2 on: August 29, 2020, 12:22:22 AM »
If you're capable of DIY to the level of quality required, then sure.

As for the rest of it, it's all negotiation.  In my state, there is a standard clause in there about home inspections and that the seller will make repairs not to exceed $X, where $X is specified by the buyer on the contract template.  I once sold a home and the buyer found a few minor things and wanted us to pay $X to fix them.  We thought they were being unreasonable on some of the items and told them to pound sand.  We pointed out that we would pay for repairs not to exceed $X meant $X was a maximum limit, not a guarantee.  IIRC the buyer grumbled and then gave in.

But it all depends...do you have other offers in the fire?  How badly do they want the house?  Have they been a difficult counterparty thus far or mostly reasonable?  Etc.

What I would suggest is to do what you think is reasonable.  Most people, if you give them a reasonable explanation to why you will or won't do something, will go along with it.  So it sounds like you think the closet doors are unreasonable, so don't do those.  If there are things in the inspection report that you think are reasonable (like the GFCIs, those sound reasonable) and are willing to fix, it'd probably go a long way to give them a partial victory and fix those.

Finally, if you have an agent on your side of the transaction (or maybe if they have one on their side), you can talk to them - they'll have a rolodex full of handymen who can come in and take care of small stuff like that probably quickly and for very little coin.  It can often be easier and more efficient to go through them than to try to find your own contractors or servicepeople on short notice.

For the GFCI, I know that the outlets at least in one of the bathrooms (i think both but not 100%) are connected to a GFCI outlet that's out in the garage (not sure what the logic is behind this). Anyway, there have been times where the outlets will just turn off (maybe from running higher voltage items not sure?) and I have to go out to the garage and hit the reset switch to get these outlets functional again. Kind of weird but that's how it's currently setup. Is this 'sufficient' enough to give that finding the "boot"? For the laundry room fixtures, I could probably just go in and do those myself but yea not sure I want to spend more time/effort if I don't have to. We're having a meeting with our realtor soon to discuss all this. At a minimum, the closet doors sound unreasonable to me, but for the remainder of the items I'm not really sure... the fireplace damper one is silly because we've never used the fireplace and I'm not sure who would here in Southern California. But if these buyers plan on renting out (which it seems they may), I guess there's some liability there. Still, one would be insane to turn that fireplace on where we live lol.

The AC condenser findings seems strange to me too - there's a little rust? Uhh it's outside, so yeah... it's not level? Really? The unit is around 15 years old, so there might be a little settling? We actually had the unit flushed out and cleaned twice in the past several years. It runs fine. Bottom line is that it has been working and running very well. Yea, it's up there in age and will probably need to be replaced soon (probably not something we would mention for framing the response haha)

So far the buyers seem to be cooperative. Thing is, they're apparently out of the country buyers and have a realtor translating/interfacing for them, along with a couple of friends of theirs who live out here. So it seems like they're buying sight unseen and likely would be turning this into a rental. They haven't really shown or given us many demands up until this point.

I'm not sure what all those items would roughly cost if we just offered them a credit to account for all of it (well, minus the ones we think are unreasonable)
« Last Edit: August 29, 2020, 12:32:48 AM by jeromedawg »

Freedomin5

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #3 on: August 29, 2020, 12:56:25 AM »
Are we only talking about $500 here? How much is the selling price? Is it worth the hassle of nickel and diming the buyer and potentially losing this buyer for a measly $500? If I were the buyer, Id think you were being penny wise, pound foolish.

jeromedawg

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #4 on: August 29, 2020, 12:57:19 AM »
Are we only talking about $500 here? How much is the selling price? Is it worth the hassle of nickel and diming the buyer and potentially losing this buyer for a measly $500? If I were the buyer, I’d think you were being penny wise, pound foolish.

The $500 is not what I'm concerned about. That only pertains the a credit for the "missing closet doors" anyway.
It's them asking us to repair everything else outlined.

Removal of contingencies is 8/30 btw


EDIT: Realtor is saying that because these are out of country investors, they may see this as a "black and white" checklist where they expect everything to be fixed pretty much. I think the reasoning is that they want this to be a turnkey rental and might expect it as such. There's a lot on the table if they were to back-out if we were to try to negotiate and they didn't like it (certain things we would call 'unreasonable' they may see as non-negotiable and it may be enough for them to say "you know what forget it")

I'm gathering quotes from various HVAC/plumbing companies at least on the HVAC and plumbing related items.

I may tackle the GFCI and washing machine hose bib replacements myself.

The closet door request seems unreasonable and also 'leveling' of the AC condenser unit subjective (the inspector took pictures of the unit in the sense that it isn't "level" compared to the pavers around it... he didn't even bother taking pictures of the unit WITH a level on it to determine whether it's truly level or not. I guess when I go back I'll check on this but you'd think if he was going to call that out he'd at least show this.

Anyway, I think if we were going to go the route of countering with a credit we would probably need to get some hard quotes on these items even before that, hence the quote gathering for the HVAC/plumbing.
« Last Edit: August 29, 2020, 03:16:29 AM by jeromedawg »

bacchi

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #5 on: August 29, 2020, 10:09:10 AM »
For the GFCI, I know that the outlets at least in one of the bathrooms (i think both but not 100%) are connected to a GFCI outlet that's out in the garage (not sure what the logic is behind this). Anyway, there have been times where the outlets will just turn off (maybe from running higher voltage items not sure?) and I have to go out to the garage and hit the reset switch to get these outlets functional again. Kind of weird but that's how it's currently setup. Is this 'sufficient' enough to give that finding the "boot"?

The easiest thing is to just buy the "GFCI Protected Outlet" stickers (if it's truly protected) but I can see how having one local to the bathroom is a lot more convenient than running out to the garage.

$500 for closet doors? Unless it's code (I doubt it; even a bathroom door isn't IRC code), go to Ikea and get some sliding screens: https://www.ikea.com/us/en/p/vattenax-panel-curtain-gray-white-20299315/

FINate

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #6 on: August 29, 2020, 10:27:50 AM »
Is it a buyer's or a seller's market?

If it's a seller's market offer them a credit for the approximate amount for THEM to do the repairs.

If it's a buyer's market and they've made a good offer, then just bang out the repairs and get it done ASAP. Yes, you can DIY stuff. The plumbing corrosion is easy: Clean with a wire brush, and then apply a corrosion inhibitor. Buy an outlet tester to verify the GFCI status of outlets and then apply the stickers. I would hire out the HVAC stuff.

I don't understand the water pressure item, 50 PSI should be within acceptable range I think? Maybe you have different standards there, but maybe you need to get a second opinion.

FINate

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #7 on: August 29, 2020, 10:56:15 AM »
Incidentally, this is one of the reasons I always pay for an inspection when selling a house. Every home more than a few years old is guaranteed to have a number of small issues, and many buyers use the contingency phase to reopen negotiations to try for a few more concessions. This puts the seller in a bad spot (and buyers know this), since going back on market doesn't look good because people wonder, "what's wrong with it?" So $500-$1000 for a thorough inspection that goes to all prospective buyers (and which they sign paperwork saying they have read) is well worth the money. Of course, buyers are welcome to hire their own inspector who may find new issues, but this is less likely to happen and new issues are likely to be even smaller in scope therefore cheap and easy to fix.

Jon Bon

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #8 on: August 29, 2020, 11:17:29 AM »
Incidentally, this is one of the reasons I always pay for an inspection when selling a house. Every home more than a few years old is guaranteed to have a number of small issues, and many buyers use the contingency phase to reopen negotiations to try for a few more concessions. This puts the seller in a bad spot (and buyers know this), since going back on market doesn't look good because people wonder, "what's wrong with it?" So $500-$1000 for a thorough inspection that goes to all prospective buyers (and which they sign paperwork saying they have read) is well worth the money. Of course, buyers are welcome to hire their own inspector who may find new issues, but this is less likely to happen and new issues are likely to be even smaller in scope therefore cheap and easy to fix.

Interesting strategy. I have seen of folks paying for an appraisal pre-sale but an inspection is different. That way you have some leverage when they offer X price and want money back when it was already a known issue.

However this is a massive sellers market, so often times inspections are a take or leave it situation. So if the house is falling down you can pass, but you cant try to squeeze the seller out of an extra few grand just to be a dick. (looking at you radon!)


FINate

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #9 on: August 29, 2020, 11:44:56 AM »
Interesting strategy. I have seen of folks paying for an appraisal pre-sale but an inspection is different. That way you have some leverage when they offer X price and want money back when it was already a known issue.

However this is a massive sellers market, so often times inspections are a take or leave it situation. So if the house is falling down you can pass, but you cant try to squeeze the seller out of an extra few grand just to be a dick. (looking at you radon!)

I like to avoid surprises, even in a seller's market. I also want to avoid potential litigation later on. So I always disclose as much as possible, and the inspection rounds things out by finding stuff I didn't know about or simply forgot. Having the buyer on record for everything disclosed in the inspection means they can't come back later for these things. Though perhaps this is not an issue in less litigious states.

jeromedawg

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #10 on: August 29, 2020, 01:13:28 PM »
Is it a buyer's or a seller's market?

If it's a seller's market offer them a credit for the approximate amount for THEM to do the repairs.

If it's a buyer's market and they've made a good offer, then just bang out the repairs and get it done ASAP. Yes, you can DIY stuff. The plumbing corrosion is easy: Clean with a wire brush, and then apply a corrosion inhibitor. Buy an outlet tester to verify the GFCI status of outlets and then apply the stickers. I would hire out the HVAC stuff.

I don't understand the water pressure item, 50 PSI should be within acceptable range I think? Maybe you have different standards there, but maybe you need to get a second opinion.

Thanks. This is a sellers market. But the offer we received is an all cash offer that's $10k higher than the backup offer. So yea I'm inclined just to maybe do a little DIY, like the GFCIs (btw: I think the inspector was using one of those receptacle testers to determine that they weren't GFCI but I ordered one myself anyway as it's prob a good idea to have - I have a receptacle tester but it's even more basic with no GFCI test capability IIRC)... I installed a damper clamp earlier and was 'evaluating' the washing machine spigots... good idea on those BTW as now I may just wire brush and Corrosion X those.

Buyer's excluded the water pressure issue so that one is moot.

The frustrating thing with the HVAC stuff is that most HVAC companies require a diagnostic/evaluation fee rather than being up front and giving you hard quotes on what it would cost to replace with hard piping as well as installing a float switch and "leveling the AC Condenser" - I actually went out there and put a level on top, manipulated it a bit, and it showed level to me LOL. If you put the level on the pad it's sitting on though it's slightly tilted. The condenser is from 2004, so honestly its time has passed - I think it's a bit of stretch to ask for remediation on a AC unit that's still functioning well but past its prime and that will need to be replaced soon anyway.
« Last Edit: August 29, 2020, 01:19:25 PM by jeromedawg »

jeromedawg

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #11 on: August 29, 2020, 01:25:35 PM »
For the GFCI, I know that the outlets at least in one of the bathrooms (i think both but not 100%) are connected to a GFCI outlet that's out in the garage (not sure what the logic is behind this). Anyway, there have been times where the outlets will just turn off (maybe from running higher voltage items not sure?) and I have to go out to the garage and hit the reset switch to get these outlets functional again. Kind of weird but that's how it's currently setup. Is this 'sufficient' enough to give that finding the "boot"?

The easiest thing is to just buy the "GFCI Protected Outlet" stickers (if it's truly protected) but I can see how having one local to the bathroom is a lot more convenient than running out to the garage.

$500 for closet doors? Unless it's code (I doubt it; even a bathroom door isn't IRC code), go to Ikea and get some sliding screens: https://www.ikea.com/us/en/p/vattenax-panel-curtain-gray-white-20299315/

Could we just throw up a curtain rod and hang a curtain there? I think the 'risk' is if we put up a "curtain" they could come back and say it's a curtain and not a door.
https://www.amazon.com/Spectrum-VS3280H-Accordion-Folding-White/dp/B000CSKBYA is another option but it's way more expensive. The Ikea option seems like a good 'compromise' but they could potentially still complain about it... just don't want to get in 'hot water' over something like that. On the other hand, the Ikea option actually looks good (better than the ugly accordion option) so they may be happy with it and not say anything lol. I didn't realize that the panel curtains are individually sold - in order to cover the opening (which is 59"x80") I'd need to buy three of those panel curtains ($10-15 each or $30-45 total), plus the holders ($6 each or $21 total) AND the track ($43). This would end up costing around $100 vs the ugly accordion door. I say get the accordion doors and give them exactly what they asked for... LOL

At this point I'm inclined just to fix the items that I can fix (like the GFCIs, wire brush/corrosion-Xing the spigots, and maybe putting up the ugly accordion doors or those Ikea panel curtains) and either give a credit for repairs based on a arbitrary guesstimate OR tell them to get quotes for those repairs and we either split or we give them the full amount depending on what it is.

The problem here is that our realtor is partly afraid they may just walk away if they don't want to bother with these things. They're out of country and obviously have the money to buy. At the same time they chose our place for a reason, inventory is low, and there are no other places in our neighborhood or city (I'd argue) where you can find a unit of this desirability. The problem is that the offers haven't been reflecting this practically - we only have this offer and then the backup offer that is $10k less and that's it. Not the most desirable position to be in, so we feel a bit pressed on this one.
« Last Edit: August 29, 2020, 01:45:22 PM by jeromedawg »

ctuser1

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #12 on: August 29, 2020, 01:48:14 PM »
Please double check your city building codes on GFCI.

In our city, we are apparently required to make sure that each circuit has GFCI AND AFCI protection. This means every time I touch any circuit (replacing outlets etc), I need to put a dual combo outlet on (unless there is a breaker that does both of these). Something like this: 

https://www.homedepot.com/p/Leviton-20-Amp-125-Volt-Duplex-Self-Test-SmartlockPro-Tamper-Resistant-AFCI-GFCI-Dual-Function-Outlet-White-R02-AGTR2-0KW/310385809

If you hire a local electrician, he will make sure that the work is done up to code. If you did it yourself, however, I will make sure it is up to code to avoid any future liabilities.
« Last Edit: August 29, 2020, 01:50:06 PM by ctuser1 »

SunnyDays

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #13 on: August 29, 2020, 02:16:20 PM »
GFCIs are required by code in bathrooms where I live.

Is the den an actual den, in that the door to it is wider than a usual door?  Or have you just been using a bedroom as a den?  If the latter, then I would expect a door on the closet too.

If you can get a quick sale by doing everything on the list for a reasonable amount, then do it.  Get your money and move on.

jeromedawg

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #14 on: August 29, 2020, 02:16:31 PM »
Please double check your city building codes on GFCI.

In our city, we are apparently required to make sure that each circuit has GFCI AND AFCI protection. This means every time I touch any circuit (replacing outlets etc), I need to put a dual combo outlet on (unless there is a breaker that does both of these). Something like this: 

https://www.homedepot.com/p/Leviton-20-Amp-125-Volt-Duplex-Self-Test-SmartlockPro-Tamper-Resistant-AFCI-GFCI-Dual-Function-Outlet-White-R02-AGTR2-0KW/310385809

If you hire a local electrician, he will make sure that the work is done up to code. If you did it yourself, however, I will make sure it is up to code to avoid any future liabilities.

Shouldn't this have been called out in the inspection report? So if I go based on what it says in that report (the only mention of "AFCI" is in relationship to the breaker panel - all outlets he just mentions "GFCI"). Presumably the inspector is basing his report on the current city code, no?

BTW: is it possible to even obtain a copy of the current 2019 California electrical code booklet for free? It seems like you have to pay for this

Closest thing I've found thus far is here (from the city of Santa Ana):
https://www.santa-ana.org/sites/default/files/2016%20RES%20Electrical%20Guidelines_external%20%20(1).pdf

"AFCI Protection:
Almost all 125-volt 15 and 20 ampere branch circuits in a dwelling must be arc-fault circuit-interrupter
(AFCI) protected. This is all circuits - including lighting (closets too) and the power for smoke or carbon
monoxide alarms. A listed combination-type overcurrent protective device is required.
These circuits must be 2-wire (black & white) only. If 3-wire (black, red, & white) circuits are used, then
two-pole AFCI circuit breakers would be needed. Only bathrooms, garage, crawl space, attic, and outdoor
circuits do not require this special protection. An indoor switch for an exterior light must also have AFCI.
See section 210.12"

and

"A ground-fault circuit-interrupter protected receptacle (GFCI) outlet is required adjacent to each basin in
every bathroom. Outlet must be located within 3 ft. of basin edge. Locate on wall, partition, on face, or side
of cabinet. In no case, more than 12 inches below basin. See section 210.52(D).
At least one, 20-ampere branch circuit must be installed to serve only receptacle outlets in bathrooms. That
circuit may power lights, fans and other loads in that same bathroom only when that circuit feeds no other
rooms. In other words, each bathroom must have its own dedicated circuit if anything besides the
bathroom sink receptacle outlet is fed from that circuit. 210.11(C)(3)"
« Last Edit: August 29, 2020, 02:28:12 PM by jeromedawg »

jeromedawg

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #15 on: August 29, 2020, 02:31:13 PM »
GFCIs are required by code in bathrooms where I live.

Is the den an actual den, in that the door to it is wider than a usual door?  Or have you just been using a bedroom as a den?  If the latter, then I would expect a door on the closet too.

If you can get a quick sale by doing everything on the list for a reasonable amount, then do it.  Get your money and move on.

The den has a double door (one door has a dummy knob but it can swing out if not locked in place) .

So I think it was originally a "den" because of that opening that we closed off (so maybe it has to be considered a bedroom since all walls are closed up)? All these units are known as "3/2s" in our neighborhood...not that that matters I guess at this point.

We are working on remediating as much as we can but contingency removal is tomorrow and the buyers gave us this inspection report last night, so it's very much at the last hour at this point.

FINate

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #16 on: August 29, 2020, 02:42:54 PM »
Is it a buyer's or a seller's market?

If it's a seller's market offer them a credit for the approximate amount for THEM to do the repairs.

If it's a buyer's market and they've made a good offer, then just bang out the repairs and get it done ASAP. Yes, you can DIY stuff. The plumbing corrosion is easy: Clean with a wire brush, and then apply a corrosion inhibitor. Buy an outlet tester to verify the GFCI status of outlets and then apply the stickers. I would hire out the HVAC stuff.

I don't understand the water pressure item, 50 PSI should be within acceptable range I think? Maybe you have different standards there, but maybe you need to get a second opinion.

Thanks. This is a sellers market. But the offer we received is an all cash offer that's $10k higher than the backup offer. So yea I'm inclined just to maybe do a little DIY, like the GFCIs (btw: I think the inspector was using one of those receptacle testers to determine that they weren't GFCI but I ordered one myself anyway as it's prob a good idea to have - I have a receptacle tester but it's even more basic with no GFCI test capability IIRC)... I installed a damper clamp earlier and was 'evaluating' the washing machine spigots... good idea on those BTW as now I may just wire brush and Corrosion X those.

Buyer's excluded the water pressure issue so that one is moot.

The frustrating thing with the HVAC stuff is that most HVAC companies require a diagnostic/evaluation fee rather than being up front and giving you hard quotes on what it would cost to replace with hard piping as well as installing a float switch and "leveling the AC Condenser" - I actually went out there and put a level on top, manipulated it a bit, and it showed level to me LOL. If you put the level on the pad it's sitting on though it's slightly tilted. The condenser is from 2004, so honestly its time has passed - I think it's a bit of stretch to ask for remediation on a AC unit that's still functioning well but past its prime and that will need to be replaced soon anyway.

I hate HVAC systems since they seem to go out on me in the months before I sell. They are expensive and a pain in the rear to replace, and with a system that old you usually cannot replace just the AC so looking at a total system replacement once it goes. This requires permits and a duct pressure test in California. If the pressure test fails you have the privilege of tearing up your walls to find the leaky ductwork/chase. And it can take weeks to get the work scheduled and done.

If it's currently working I wouldn't touch it. Instead, DIY the small/easy stuff then offer them and extra $500 to get the HVAC serviced on their own time.

jeromedawg

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #17 on: August 29, 2020, 04:01:34 PM »
So my realtor suggested just going ahead and telling them we'll concede to comply to fixing everything on that list - no credits.

I plan to do everything except the HVAC related items and outsource that stuff to a qualified pro - my realtor thinks the work won't cost more than $500 and told me he's willing to risk that bet and if it's more he'll pay the difference lol. Not so sure about that, I think it could get pricey. I think he really just wants to close the deal. And so do we. I don't want to play games with this buyer - there's a chance they'll come back and say $500 isn't enough for those HVAC issues or something else stupid. Right now they have the leverage of being the highest offer (I'm sure they anticipated it putting in the offer they did) and they can back out in a whim if they want and not feel so bad (because they're all cash). So we're playing it conservatively. After settling myself down a little, a majority of those items seem more manageable to handle.  I'm planning to pickup some wire brushes from Harbor Freight on the way up so hopefully can clean those things up. Otherwise, it's a bit over $200~ to get replaced (I am *not* comfortable or wanting to mess with plumbing fixtures this late in the stage of the game...)

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #18 on: August 29, 2020, 04:31:34 PM »
If you have time, I'd recommend reading the chapter in Freakanomics on real estate agents; it may help understand your realtor's behavior and also give you some insights.  The short version is that your real estate agent is going to get paid $X once the transaction closes, but nothing if it doesn't, and only about 1.5% of any difference in price if there are concessions made such as these repairs that you're talking about.  They are correctly reading that you are the softy in this transaction and that they have more influence over you than the buyer, so they're taking the path of least resistance to get their $X.

If you think your realtor will give you an accurate answer, ask them what percentage of offers are ones where the buyer just walks away over little stuff.  Financing falling through, sure, but this is a cash buyer.  A low-ball offer that gets ignored, sure, but that's not the case here either.  Personally I think it's quite rare once you get to this stage in the process, but YMMV.

FINate

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #19 on: August 29, 2020, 04:51:37 PM »
So my realtor suggested just going ahead and telling them we'll concede to comply to fixing everything on that list - no credits.

I plan to do everything except the HVAC related items and outsource that stuff to a qualified pro - my realtor thinks the work won't cost more than $500 and told me he's willing to risk that bet and if it's more he'll pay the difference lol. Not so sure about that, I think it could get pricey. I think he really just wants to close the deal. And so do we. I don't want to play games with this buyer - there's a chance they'll come back and say $500 isn't enough for those HVAC issues or something else stupid. Right now they have the leverage of being the highest offer (I'm sure they anticipated it putting in the offer they did) and they can back out in a whim if they want and not feel so bad (because they're all cash). So we're playing it conservatively. After settling myself down a little, a majority of those items seem more manageable to handle.  I'm planning to pickup some wire brushes from Harbor Freight on the way up so hopefully can clean those things up. Otherwise, it's a bit over $200~ to get replaced (I am *not* comfortable or wanting to mess with plumbing fixtures this late in the stage of the game...)

If it's a seller's market then then the buyer doesn't have the leverage. What's the harm in trying the $500 credit? If they don't like it they can counter, right? If they do walk away due to normal back-and-forth on contingencies then were they ever really a serious buyer? I guess I don't understand why they need to be treated so delicately. If you start opening up the HVAC and find more issues you could be out thousands with a job that could take a week or more. Not saying your HVAC is necessarily in bad shape, 16-years is old but not unheard of and sometimes these things keep limping along for 20-30 years (and sometimes not). I'm just not a fan of opening potential cans of worms while in contract. Frankly, I'm surprised that your agent wants to go in this direction since the lowest risk option is to find a dollar amount all parties can agree on as fair and then let the new owners service or replace or whatever the HVAC after close of contract.

ETA: But it's your transaction and your agent, so go with what makes the most sense to you.
« Last Edit: August 29, 2020, 04:53:40 PM by FINate »

ctuser1

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #20 on: August 29, 2020, 05:20:54 PM »
Please double check your city building codes on GFCI.

In our city, we are apparently required to make sure that each circuit has GFCI AND AFCI protection. This means every time I touch any circuit (replacing outlets etc), I need to put a dual combo outlet on (unless there is a breaker that does both of these). Something like this: 

https://www.homedepot.com/p/Leviton-20-Amp-125-Volt-Duplex-Self-Test-SmartlockPro-Tamper-Resistant-AFCI-GFCI-Dual-Function-Outlet-White-R02-AGTR2-0KW/310385809

If you hire a local electrician, he will make sure that the work is done up to code. If you did it yourself, however, I will make sure it is up to code to avoid any future liabilities.


Shouldn't this have been called out in the inspection report? So if I go based on what it says in that report (the only mention of "AFCI" is in relationship to the breaker panel - all outlets he just mentions "GFCI"). Presumably the inspector is basing his report on the current city code, no?

I would personally never make that assumption. I have had a chance to deal with only two inspectors so far. I would not trust any one of them to have any detailed knowledge on any of the trades (electricity/plumbing etc).

Now - are all your breakers AFCI? If so, that will cover all the circuits and you are good. My house was build in 1978, so the breakers are NOT AFCI.

Anytime I need to mess with a specific outlet (I did a lot of that in the first year after buying as the last owner did a lot of shortcuts), I used to slap on a GFCI+AFCI dual one that would protect that outlet + the rest of the circuit from that point onwards. Next, if I need to replace another outlet on the same circuit, then I only need to worry if that next outlet is earlier in the circuit - i.e. it is not protected by the AFCI+GFCI outlet I had already slapped on.

I am not an electrician (even though I have a degree in an electrical engineering sub-discipline). So don't take what I say as a substitute for professional advise.

BTW: is it possible to even obtain a copy of the current 2019 California electrical code booklet for free? It seems like you have to pay for this

Closest thing I've found thus far is here (from the city of Santa Ana):
https://www.santa-ana.org/sites/default/files/2016%20RES%20Electrical%20Guidelines_external%20%20(1).pdf

"AFCI Protection:
Almost all 125-volt 15 and 20 ampere branch circuits in a dwelling must be arc-fault circuit-interrupter
(AFCI) protected. This is all circuits - including lighting (closets too) and the power for smoke or carbon
monoxide alarms. A listed combination-type overcurrent protective device is required.
These circuits must be 2-wire (black & white) only. If 3-wire (black, red, & white) circuits are used, then
two-pole AFCI circuit breakers would be needed. Only bathrooms, garage, crawl space, attic, and outdoor
circuits do not require this special protection. An indoor switch for an exterior light must also have AFCI.
See section 210.12"

and

"A ground-fault circuit-interrupter protected receptacle (GFCI) outlet is required adjacent to each basin in
every bathroom. Outlet must be located within 3 ft. of basin edge. Locate on wall, partition, on face, or side
of cabinet. In no case, more than 12 inches below basin. See section 210.52(D).
At least one, 20-ampere branch circuit must be installed to serve only receptacle outlets in bathrooms. That
circuit may power lights, fans and other loads in that same bathroom only when that circuit feeds no other
rooms. In other words, each bathroom must have its own dedicated circuit if anything besides the
bathroom sink receptacle outlet is fed from that circuit. 210.11(C)(3)"

GFCI + AFCI combo outlets are < $30 a pop. If you need to replace a few (how many circuits need it? 4? 5?) then maybe it's easier just to drop a  hundred and change to  buy these from HD/Lowes (with an ebay coupon maybe).

If you wanted to get just GFCI, they are ~$20 or so each! So it will only be $10 a pop savings each if you went with GFCI only.

« Last Edit: August 29, 2020, 05:34:45 PM by ctuser1 »

jeromedawg

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #21 on: August 29, 2020, 07:31:12 PM »
Please double check your city building codes on GFCI.

In our city, we are apparently required to make sure that each circuit has GFCI AND AFCI protection. This means every time I touch any circuit (replacing outlets etc), I need to put a dual combo outlet on (unless there is a breaker that does both of these). Something like this: 

https://www.homedepot.com/p/Leviton-20-Amp-125-Volt-Duplex-Self-Test-SmartlockPro-Tamper-Resistant-AFCI-GFCI-Dual-Function-Outlet-White-R02-AGTR2-0KW/310385809

If you hire a local electrician, he will make sure that the work is done up to code. If you did it yourself, however, I will make sure it is up to code to avoid any future liabilities.


Shouldn't this have been called out in the inspection report? So if I go based on what it says in that report (the only mention of "AFCI" is in relationship to the breaker panel - all outlets he just mentions "GFCI"). Presumably the inspector is basing his report on the current city code, no?

I would personally never make that assumption. I have had a chance to deal with only two inspectors so far. I would not trust any one of them to have any detailed knowledge on any of the trades (electricity/plumbing etc).

Now - are all your breakers AFCI? If so, that will cover all the circuits and you are good. My house was build in 1978, so the breakers are NOT AFCI.

Anytime I need to mess with a specific outlet (I did a lot of that in the first year after buying as the last owner did a lot of shortcuts), I used to slap on a GFCI+AFCI dual one that would protect that outlet + the rest of the circuit from that point onwards. Next, if I need to replace another outlet on the same circuit, then I only need to worry if that next outlet is earlier in the circuit - i.e. it is not protected by the AFCI+GFCI outlet I had already slapped on.

I am not an electrician (even though I have a degree in an electrical engineering sub-discipline). So don't take what I say as a substitute for professional advise.

BTW: is it possible to even obtain a copy of the current 2019 California electrical code booklet for free? It seems like you have to pay for this

Closest thing I've found thus far is here (from the city of Santa Ana):
https://www.santa-ana.org/sites/default/files/2016%20RES%20Electrical%20Guidelines_external%20%20(1).pdf

"AFCI Protection:
Almost all 125-volt 15 and 20 ampere branch circuits in a dwelling must be arc-fault circuit-interrupter
(AFCI) protected. This is all circuits - including lighting (closets too) and the power for smoke or carbon
monoxide alarms. A listed combination-type overcurrent protective device is required.
These circuits must be 2-wire (black & white) only. If 3-wire (black, red, & white) circuits are used, then
two-pole AFCI circuit breakers would be needed. Only bathrooms, garage, crawl space, attic, and outdoor
circuits do not require this special protection. An indoor switch for an exterior light must also have AFCI.
See section 210.12"

and

"A ground-fault circuit-interrupter protected receptacle (GFCI) outlet is required adjacent to each basin in
every bathroom. Outlet must be located within 3 ft. of basin edge. Locate on wall, partition, on face, or side
of cabinet. In no case, more than 12 inches below basin. See section 210.52(D).
At least one, 20-ampere branch circuit must be installed to serve only receptacle outlets in bathrooms. That
circuit may power lights, fans and other loads in that same bathroom only when that circuit feeds no other
rooms. In other words, each bathroom must have its own dedicated circuit if anything besides the
bathroom sink receptacle outlet is fed from that circuit. 210.11(C)(3)"

GFCI + AFCI combo outlets are < $30 a pop. If you need to replace a few (how many circuits need it? 4? 5?) then maybe it's easier just to drop a  hundred and change to  buy these from HD/Lowes (with an ebay coupon maybe).

If you wanted to get just GFCI, they are ~$20 or so each! So it will only be $10 a pop savings each if you went with GFCI only.

I ordered a 3 pack of GFCI only for around $33 or so after tax. If I were to get 3x GFCI/AFCI outlets it would end up costing closer to $80+ I think

jeromedawg

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #22 on: August 30, 2020, 08:07:19 PM »
For the GFCI, I know that the outlets at least in one of the bathrooms (i think both but not 100%) are connected to a GFCI outlet that's out in the garage (not sure what the logic is behind this). Anyway, there have been times where the outlets will just turn off (maybe from running higher voltage items not sure?) and I have to go out to the garage and hit the reset switch to get these outlets functional again. Kind of weird but that's how it's currently setup. Is this 'sufficient' enough to give that finding the "boot"?

The easiest thing is to just buy the "GFCI Protected Outlet" stickers (if it's truly protected) but I can see how having one local to the bathroom is a lot more convenient than running out to the garage.

$500 for closet doors? Unless it's code (I doubt it; even a bathroom door isn't IRC code), go to Ikea and get some sliding screens: https://www.ikea.com/us/en/p/vattenax-panel-curtain-gray-white-20299315/

So I bought a Sperry outlet tester with GFCI test capability and just confirmed that all three bathroom outlets are tied into the GFCI in the garage. Sounds like stickers will be sufficient then?

waltworks

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #23 on: August 30, 2020, 08:14:52 PM »
You're overthinking this. It's all minor stuff, offer the buyers $2k or something (I made that amount up) to have the work done and call it good.

This is normal when selling a house.

-W

Chris Pascale

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #24 on: August 30, 2020, 10:54:43 PM »
You're overthinking this. It's all minor stuff, offer the buyers $2k or something (I made that amount up) to have the work done and call it good.

This is normal when selling a house.

-W

I 100% agree. Do whatever is easiest and just wrap up the deal.

I also agree with the idea that they might think "this is on the inspection; it must be mandatory."

affordablehousing

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #25 on: September 01, 2020, 03:09:51 PM »
I think a lot of overseas condo investors are just parking cash and diversifying portfolios; no one will ever live in your unit. That said, they pay stupid amounts of money and want everything safe since they won't ever be there. I'd just fix it all and be done with it. If they want doors, just slam some doors from habitat restore in there, take a picture for their inspector and call it a day. Your payment comes in the form of their high bid.

jeromedawg

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #26 on: September 02, 2020, 11:30:55 PM »
I think a lot of overseas condo investors are just parking cash and diversifying portfolios; no one will ever live in your unit. That said, they pay stupid amounts of money and want everything safe since they won't ever be there. I'd just fix it all and be done with it. If they want doors, just slam some doors from habitat restore in there, take a picture for their inspector and call it a day. Your payment comes in the form of their high bid.

This is *exactly* what we did, and pretty much what our realtor was hinting at the whole time going through this. A bit painful but all the plumbing, hvac and closet doors ended up costing around $600. I think if we started playing 'games' with them offering credits they would have complained that $1000 isn't enough (seeing how they wanted $500 for the closet doors... I paid $60 for a couple ugly accordion doors from Walmart and installed them on Monday when we got the HVAC stuff and washing machine valves replaced). The buyer had their friend come walk through today - they didn't even have an inspector come back out. We sent them pictures and even videos where I explained the GFCI situation lol. No questions asked. Escrow is slated to close tomorrow. I'm glad this is going to be over with.

OH YEA, since last posting we had another scare over the weekend because of the upstairs unit. I woke up early Saturday morning to my Ring doorbell going off and thought it was odd anyone would be at our door at 7:45am. The second time it went off it was some firemen who went up to our door, peered in the half window, and stated "I don't see any water in here..." and walked off. I immediately jumped out of bed and started calling the non-emergency PD line. They patched me through to the fire dept who said it wasn't our unit... phew. But I still decided it would be a good idea just to head down there and make doubly-sure. As I pulled up there were like 5-6 different neighbors hovering around like angry bees. One guy was super aggro and nearly confronted me before I had to settle him down and tell him the bell going off was NOT mine and it's the upstairs unit's. He ended up confronting the upstairs neighbor (who it turns out is a bit of an arrogant and unapologetic prick) and the guy was up in arms and frantic about the whole thing. Anyway, aggro neighbor grabbed an allen wrench, borrowed my ladder, and climbed up and loosened the bell so that it wouldn't ring (but it was still buzzing). It was the upstairs unit fire sprinkler alarm that went off due to a leak in the system, which it looked like was a drip at the alarm box behind the panel right outside their garage unit. The upstairs neighbors were clueless and throwing their arms up in the air and panicking. I ended up getting the landlord's info from them and contacted her to let her know, advising that she ought to get a fire protection services company out there ASAP to remediate the leak and alarm (as a lot of neighbors were pissed off). She sort of wrote it off as "oh it seems like it's just a small leak" - smh... she didn't get it remediated until Monday and was trying to get a plumber and handyman to fix it (not heeding my advice). I had to explain to her that a "small leak" may not seem like a big deal until your neighbor has to have his/her walls torn out out due to water damage (which is what happened when the previous owner of the upstairs unit had her fridge leak and she tried to write it off in the same way - we had to rip out cabinets, drywall, carpeting, etc). I wasn't about to have any of that again, ESPECIALLY in the middle of escrow, so I really got on her case.

That said, the issue has been remediated, and we can breathe easy now... for the most part. Let's just hope there are no other wrenches thrown in at this point :T Also, I'm so happy to get out from under someone and notably these latest neighbors - they're heavy footed, have a toddler who loves to scream, a husband who has short fuse and drops F-bombs all over the place when he's upset/mad/frustrated (including out on his balcony for everyone to hear), and a wife who is largely dismissive. The quality of neighbors in this community has drastically gone downhill over the past decade living there. Don't get me started on the idiots flying through the community at 30mph+. While it's slightly sentimental (having started our family there) I mostly don't miss the place due to so many of the inconsiderate neighbors we had.   
« Last Edit: September 02, 2020, 11:53:15 PM by jeromedawg »

jeromedawg

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #27 on: September 03, 2020, 09:12:31 PM »
ESCROW HAS OFFICIALLY CLOSED! The check has been cut and we just have to get it from our realtor and deposit. Bittersweet because today I was majorly bogged down by some updates with work related crap, but relieved that this home sale situation is finally over and done with.

cchrissyy

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #28 on: September 03, 2020, 10:47:10 PM »
congrats!

FINate

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #29 on: September 04, 2020, 08:35:54 AM »
Congratulations! Always a great feeling!

Another Reader

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #30 on: September 04, 2020, 11:16:55 AM »
ESCROW HAS OFFICIALLY CLOSED! The check has been cut and we just have to get it from our realtor and deposit. Bittersweet because today I was majorly bogged down by some updates with work related crap, but relieved that this home sale situation is finally over and done with.

Good job! On to the next chapter!

ctuser1

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #31 on: September 04, 2020, 09:50:56 PM »
Congrats.

MissPeach

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #32 on: September 09, 2020, 10:22:45 AM »
Congrats! I'm going through something similar not too far from you but on the buying side and I was a bit surprised my agent suggested I ask for the repairs when most of them seemed like $500 or so in total and some just seemed like the inspector was filling the report.

In the future, it might also be worth to just offer a home warranty. I got that paid for by the seller on my deal and it put me at ease with a lot of the larger things like the AC being towards the end of its life.

But as a buyer the closet doors was crazy to me. If I found that in a perspective house and wanted it to be a closet I would just install some built ins or something myself.

Dicey

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #33 on: September 09, 2020, 12:44:22 PM »
Congrats! I'm going through something similar not too far from you but on the buying side and I was a bit surprised my agent suggested I ask for the repairs when most of them seemed like $500 or so in total and some just seemed like the inspector was filling the report.

In the future, it might also be worth to just offer a home warranty. I got that paid for by the seller on my deal and it put me at ease with a lot of the larger things like the AC being towards the end of its life.

But as a buyer the closet doors was crazy to me. If I found that in a perspective house and wanted it to be a closet I would just install some built ins or something myself.
Alas, my friend, most home warranties are worthless, which I hope you never have reason to discover. They're popular with realtors because they take the onus off the seller and give the buyers a false sense of ease.

We flipped a house and sold it last year. It was redone from top to bottom, inside and out, with all new electrical, A/C update (it had been incorrectly installed a few years prior) and all new high grade appliances, including washer and dryer, complete with manufacturer's warranties. The buyers were first-time home buyers. They asked for a warranty. We would rather have given them cash. Since they offered $32k over asking ($1.231m), we bit our lip and agreed to it. We also told them to call us first if anything went wrong. Other than a couple of "How does this work?" calls in the first few months, there have been zero issues. What a waste of six hundred bucks.

BTW, we have bought a number of homes where the warranty was included. We never ask for it, but see: Realtors who think they're protecting their sellers. Never have we had a satisfactory result from a warranty company. The most recent was when the water dispenser went out on an otherwise perfectly good refrigerator. We paid the $75 service call fee. Dude came out, said he'd have to order a part* and the company would call to set up an appointment when the part came in. Ha! When they finally called, it was to say the part wasn't available, they weren't going to fix it, and they offered us $80 toward the cost of a new refrigerator. We protested vigorously and they wouldn't budge. We wanted it to be fixed because it matched the rest of the appliances. No dice. We had to replace it, because tenants expect a working water dispenser, and now it doesn't match the rest of the appliances. So we got $5.00 net from the warranty company. Whoppee.

And to anyone who says, "Well, we got a brand new X when the old one broke", it's most likely a bottom of the line model.

To anyone who finds themselves in this situation, ask for the money instead of a home warranty.

*We have since learned that this is code for "I know you're gonna get screwed and I don't want to be here when you find out."

Cpa Cat

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #34 on: September 09, 2020, 12:55:16 PM »
I knew a home inspector who told me that he almost always puts "Noisy bathroom fan" in his reports.

He said people want to see things in the report, so he will always find things, even if he thinks the house is in good repair. If he gives them an inspection report that's too skinny, the buyer thinks he didn't do his job and complains.

So I took it with a grain of salt when I sold a house and the inspector said "Grade near the foundation may or may not be neutral or negative." I was like: Wait what? Is it or isn't it? Do you own a level? Did you find any evidence of water intrusion from a negative grade? No? Then why the F would you put that in there? Then I remembered the inspector who told me about noisy ceiling fans.

The stupid thing is that our buyer asked us to "fix the grade." We declined. They bought the house anyway.

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #35 on: September 09, 2020, 12:58:13 PM »
Congrats! I'm going through something similar not too far from you but on the buying side and I was a bit surprised my agent suggested I ask for the repairs when most of them seemed like $500 or so in total and some just seemed like the inspector was filling the report.

In the future, it might also be worth to just offer a home warranty. I got that paid for by the seller on my deal and it put me at ease with a lot of the larger things like the AC being towards the end of its life.

But as a buyer the closet doors was crazy to me. If I found that in a perspective house and wanted it to be a closet I would just install some built ins or something myself.
Alas, my friend, most home warranties are worthless, which I hope you never have reason to discover. They're popular with realtors because they take the onus off the seller and give the buyers a false sense of ease.

We flipped a house and sold it last year. It was redone from top to bottom, inside and out, with all new electrical, A/C update (it had been incorrectly installed a few years prior) and all new high grade appliances, including washer and dryer, complete with manufacturer's warranties. The buyers were first-time home buyers. They asked for a warranty. We would rather have given them cash. Since they offered $32k over asking ($1.231m), we bit our lip and agreed to it. We also told them to call us first if anything went wrong. Other than a couple of "How does this work?" calls in the first few months, there have been zero issues. What a waste of six hundred bucks.

BTW, we have bought a number of homes where the warranty was included. We never ask for it, but see: Realtors who think they're protecting their sellers. Never have we had a satisfactory result from a warranty company. The most recent was when the water dispenser went out on an otherwise perfectly good refrigerator. We paid the $75 service call fee. Dude came out, said he'd have to order a part* and the company would call to set up an appointment when the part came in. Ha! When they finally called, it was to say the part wasn't available, they weren't going to fix it, and they offered us $80 toward the cost of a new refrigerator. We protested vigorously and they wouldn't budge. We wanted it to be fixed because it matched the rest of the appliances. No dice. We had to replace it, because tenants expect a working water dispenser, and now it doesn't match the rest of the appliances. So we got $5.00 net from the warranty company. Whoppee.

And to anyone who says, "Well, we got a brand new X when the old one broke", it's most likely a bottom of the line model.

To anyone who finds themselves in this situation, ask for the money instead of a home warranty.

*We have since learned that this is code for "I know you're gonna get screwed and I don't want to be here when you find out."

Eh, my fridge went on the fritz and the warranty fixed it. So while I wouldn't buy it just for me, if it's in the deal cool.

Cranky

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #36 on: September 10, 2020, 04:57:00 PM »
I think it depends on how much you want the sale.

Were making the seller replace the furnace and repair the chimneys and a couple of other lesser things. We know how much shes making on this sale and all parties are pretty motivated.

MissPeach

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Re: Seller's perspective on a buyer's inspection report demanding credits
« Reply #37 on: September 11, 2020, 08:12:25 AM »
That's good to know about the warranties.

My ex has purchased a home where that was in the deal and the a/c went out and was replaced. I don't think I would spend the money on it myself but I also didn't catch the realtor threw it in. I'm starting to wonder if there's a warranty kick back or something now.

I looked through my policy and while certain things were covered there were a lot of exclusions so I could see where it might not be worth the cost.