Home-buying Series, Resources + Tools

I’m in Student Loan Repayment and Still Bought a House | Part 5: (Terrorist) Negotiations

**Disclaimer: All of the information included in this series of posts are a personal account of my experiences and my personal opinions. I am not a real estate agent, mortgage broker, financial adviser, or attorney.

All of the information in this post hinges on the assumption that you are confident in the offer you made on a house and you can financially manage the offer amount (because in all likelihood, that will be the amount your home loan is for). After our offer was finally accepted, it hit us–WHAT HAPPENS NOW??

After you make the offer and it’s accepted, this is what happens: You’ll have a certain amount of time (within 1-2 weeks) to schedule a home inspection. After you do this, the inspection is completed, and you receive the report back, you can make requests for the seller to fix anything that needs repair. The seller will have a certain amount of time to respond to your requests (also within 1-2 weeks). Depending on the response, you can counter-respond and go back and forth as needed until someone gives or says no-dice. If you reach an agreement, the respective repairs are made by sellers. If said repairs are made and all approved requests answered for, the deal must move forward and you cannot back out. If you, as the buyer, back out after getting what you want, the seller can sue you. After all repair agreements are answered for, a closing date is scheduled.

And here it comes…

HAVE. A. REALTOR.

Aside from realtors knowing the ins and outs of making an offer and being able to guide you through the entire home-buying process, they serve as your communicator with the seller and their realtor. Or, if they don’t have a realtor and are representing themselves, your realtor will communicate directly with the sellers. No matter how lovely the sellers are, it is always a good idea to let your realtor do all the communicating. They work for you, they know the routine, and they have more experience dealing with the selling entities, and although they are working on a commission, they are not as emotionally attached to the property you’ve chosen. They are also a good safeguard against misunderstanding. Realtors know how real estate deals work. They know how to communicate such things. If you and a buyer are speaking about a giant deal and don’t actually know the rules and nuances that go with said giant deal, the results could be catastrophic.

Or, at the very least, someone gets called some very ugly names.

The Home Inspection. 

Much like utilizing a realtor–YOU. NEED. A. HOME. INSPECTION. They aren’t required, but they are essential unless you’re OK with possibly buying a money pit. A home can look like a dream come true, but when you start looking at the structure and inner workings of it, you may find things that quickly become deal-breakers. Or you might find nothing at all! In which case, you can purchase the home confident that you’re making a good choice.

First and foremost, YOU are in charge of choosing which home inspection company to use. It’s always a good idea to do your own search and choose an inspector based on your own research rather than a realtor’s or seller’s reference. You want to make sure the inspector is working for YOU and is not biased by a relationship with another party in the sale. That way, you can be sure you’re getting brutally honest and objective information about the house. Once you choose a company, they will probably ask for the home address and the realtor’s contact info so they can coordinate the appointment with the seller.

So what constitutes a good inspection company?? The internet can be a great tool for finding this out. I did a search on Google and Yelp to find customer reviews of various home inspection companies around our city. I ended up finding one that only employs inspectors with backgrounds in structural engineering. I wasn’t disappointed. During the inspection, I could tell that the inspector knew what he was doing and he was very open and enthusiastic about engaging us and explaining what he was looking for and what his findings were. That being said, make sure you can be present for the home inspection. The seller is usually not present (and really shouldn’t be) during the inspection, so you can feel free to voice any concerns and ask all the questions you want.

Don’t forget radon and termites. 

Obviously, a termite inspection is a must, especially in areas where infestations are common. I almost lost my shit while we were working out in the basement a couple days ago because I saw a tiny bug on the ceiling that looked a little too similar to the borer bees that were found on the deck. I don’t think it was actually a borer bee, but this is our house now and I will annihilate any pests that try to eat it for dinner! But radon? Radon is like climate change. Some people will deny its existence even though there is scientific evidence for its negative effects on the human body. But that’s the beauty of home-buying–it’s completely irrelevant what the seller believes if you’re the one potentially purchasing the home. If it’s an important issue to you, then it’s going to affect whether you fork over thousands of dollars and everyone else can suck it. Plus, radon is now a common concern and the seller would likely have to deal with it with the next potential buyer anyway. So if you’re concerned about radon, schedule a radon inspection.

Your Requests. 

After the inspection is complete. There may be issues that you request the seller remedy before the deal can move forward. If there’s something wrong with the plumbing, electricity, structure, etc., etc., etc., you can request that the sellers fix it. This is where you just need to go over the inspection report thoroughly and decide what’s important to you. Asking the seller to change a hideous paint color or take out a shrub because it has the wrong color blooms is ridiculous, but if there’s mold in the basement or a pipe isn’t grounded properly, that’s a major issue that needs to be addressed.

There will also probably be things on the inspection report that are technically “issues”, but you might not care about (you DO want the inspector to be thorough, after all). You don’t HAVE to request everything in the official report be addressed. For example, in ours, the inspector noted that plants were touching the vinyl on the side of the house and should be trimmed back. The reality is that they’re just lilies and not ivy tangled in the siding and tearing up the house, so that was a non-issue for us. If you can fix it easily by yourself and it’s not going to bother you, just let it go and focus on any major issues.

After the inspector’s report is returned to you (usually in no more than a couple days–we received ours that same evening), decide whether there is anything that warrants a request for remedy. If so, let your realtor know and they will draw up the paperwork for this and send it to the sellers. Again, this is where having a realtor is a lifesaver. They know how to do this, they have the resources, and they can get things completed quickly and professionally.

 The Response. 

This is the part where you’ll be thanking your lucky stars you GOT. A. REALTOR. I don’t know how things would have gone if we hadn’t had our realtor whenever we had to make contact with sellers and/or their realtors. Not all realtors or sellers have people skills, so you never know who you’re going to get. In all likelihood, you’ll probably be dealing with normal, pleasant people who just want to sell their homes and get on with their life. But if you tend to attract the crazies, getting a realtor will pay for itself within the first interaction with a seller/realtor.

Be prepared for anything.

The sellers might come back and say they’ll make all the repairs you requested and everything goes forward smoothly. Or…they could come back and say they won’t do anything and the price still stands. It may even be a combination of these responses. Either way, you just need to take the time to decide what you’re willing to accept and what you consider a deal-breaker.

The ball is technically in your court now and if your requests aren’t going to be addressed, you are free to walk away. BUT before this, you can send a second response back requesting the same things, or fewer things if you decide you can live with something after all. It’s just up to you.

Fortunately for us, the snags we hit were more of an annoyance than anything. We weren’t being forced to vacate our rental house by any particular time. If we wanted to walk away from the table, it would just mean we had to start house-hunting again. If you can get yourself into a flexible situation like that, I think it gives you the upper hand, especially if the seller is in a situation where they need to sell and move relatively soon.

Get estimates in writing.

Another possibility is that the seller offers to give you money in lieu of making the actual repairs. This way, they can close the deal sooner and you’d just need to coordinate the repairs on your own time. This isn’t a bad option at all, as long as you are receiving the correct amount for the potential repairs. 

ALWAYS get estimates in writing to accompany a seller’s response to your repairs/requests. The vast majority, if not all, companies offer free estimates. Therefore, there is NO reason why you shouldn’t be provided with written estimates if the sellers don’t want to make repairs themselves. This will also save you the time and effort in calling companies yourself just to get verbal confirmations that the costs are what people claim they are.

If the seller did not get written estimates, it means that they probably didn’t have anyone come out to look at the issue, and companies cannot guarantee their price without actually seeing the problem. It doesn’t matter if you trust the sellers or think they’re wonderful people; you don’t know each other and you need to treat this as the business transaction that it is. You’re about to throw down major bucks on a mortgage, this isn’t too much to ask. Seriously, people, just get written estimates. They’re FREE and will get your house sold quicker!

Stick to your guns (but keep a level head).

The thought of starting the house-hunting process all over again might terrify you. However, the seller also has to deal with the prospect of trying to sell their home all over again to someone else (who may be WAY more difficult than you. And that’s assuming they haven’t already purchased another home and would have to juggle TWO mortgages). Requesting that the sellers throw in a brand new top-of-the-line stove on top of making multiple repairs probably isn’t going to happen. Although you want to get a good deal, it’s important to also be realistic and realize that everyone is trying to get a good deal.

On that same point, you might be ready to walk away out of spite because you think the sellers are being ridiculous and unreasonable (the phrase, “YOU THINK I WON’T!?”, comes to mind). This is when you just need to step back, breathe, and calm down before making any more decisions.

Close your eyes and remember the complete dumps you walked through before finding your dream home–one of those sellers probably thinks their home is second to the Taj Mahal.

Some sellers are very attached to their homes and just haven’t come to terms with the fact that it’s actually selling (especially if they’ve lived there for a long time). Others might think they can pretend to be realtors and try to play hardball even though you suspect they have no idea what town they even live in. Plus, you have an actual realtor that does this for a living and can call their bluff if need be. But, in general, everyone is just thinking of themselves (which you should be too) and trying to make the best deal possible. If things start getting really stressful, remind yourself that everyone involved is likely an awesome person and doing what seems best for them, just like you!

What Next? 

If your requests have been settled satisfactorily and a deal can be reached, then celebrate that and start getting ready for your closing day!

Once we submitted our requests, received a response, sent our second response, received a second response, our requests were settled satisfactorily, and we signed all of the required contracts/documents/promises of our first born, we worked with our realtor to notify our lender that the deal was moving forward. At this point, a lot of paperwork will go to the underwriters (seriously, I would love to know what they do, for reasons I will go into further in the coming posts) and you will wait to find out when your closing is scheduled. If you’ve made it this far, that’s enough reason for celebration, so get gussied up and go out for a nice dinner! You’ll probably need a strong drink by now anyway…

Next, we’ll discuss the inevitable. Something unforeseen ALWAYS happens when a big deal is in the works. This is called The Snafu. It might be tiny, it might be huge, but I’ll tell you all about ours and how we made it to Closing Day (relatively) unscathed. Stay tuned!

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