Two Negotiations

There are two negotiation periods in most home sales. The primary negotiation takes place when the contract is agreed upon that includes the price, closing and possession. Buyers and sellers alike feel relieved once this first round has resulted in an agreement but there may be more negotiations to come if there are contingencies for financing, inspections or other things.Round 1-250.png

The purpose of an inspection is for the buyer to receive an objective evaluation about the condition of the home and its components, to identify existing defects and potential problems. The expense for inspections can be several hundred dollars and it’s reasonable for buyers to not want to spend the money before they find out if they can come to terms with the seller. From a different perspective, sellers want to know quickly if the buyer is going to reject the home due to the inspections.

Sometimes, buyers will expect sellers to make a number of the repairs listed on the report and this is where the second round of negotiations begins. If the seller refuses, the negotiations can go back and forth until one party or the other accepts the offer on the table or the contract falls apart. Both some money and further time has been invested getting to that point and obviously a termination of the contract isn’t the desired outcome for either party.

When purchasing a new home from a builder, it is expected for everything to be in working order; after all, it is new. However, it is reasonable to expect that existing homes, that are not new, have a different standard. While it’s understandable that buyers would want to be aware about major items that are not in “working order”, normal wear and tear of components based on its age should be expected.

In a highly competitive seller’s market, buyers might do whatever they can to get their contract accepted, realizing that there is another place to negotiate when they’re not competing with other buyers’ offers to purchase. One best practice for a Buyer trying to make the best offer possible is to choose their preferred home inspector and tentatively schedule the inspection just before submitting their offer to the Seller, so that the inspections contingency period can be made as short as possible. Similarly, by trying to identify and anticipate items around their home most likely to be found in need of repair/replacement by a home inspector, a Seller may then either get out in front of the probability and do the repair(s) in advance, or make sure to disclose in their property condition that’s signed by the Buyer prior to making an offer what isn’t in good working condition and that it’s accepted by the Buyer at the time a contract agreement is reached.

For this to be a WIN-WIN negotiation, both seller and buyer must feel good about the transaction. Neither party should feel that they have been taken advantage of.

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