Take home inspections, repairs into consideration

Today’s article is on home inspection and repairs. Why inspections and repairs, Tom?

Because repairs seem to be the biggest problems in real estate transactions.

By that I mean that when purchasing a resale home you need to expect that the home may need repairs and not be so shocked at a list of things that were in need of minor fix-its after an inspection. Most resale homes need some minor repairs. That’s a given. However, when consumers have home inspections, they sometimes get carried away with a list of items.

My response to that? Just because a home inspector identifies something in the review doesn’t mean it absolutely needs repair.

Is it a safety item or just a nitpicky list of things?

I suggest the following to sellers and agents when contracting negotiations. Always sell the property “as is” and add that phrase into your contract. Do not rely on the default phrase already in the contract. Being specific will make the point and eliminate the buyer’s contention and claim they didn’t understand.

As for buyers, your phrase could be: buyer reserves the right as a contingency to cancel should the inspection reveal repairs to exceed $1,500, or whatever value you decide.

There are two things of which to beware: accuracy of the seller’s disclosures and hidden defects.

Even if the sellers create a limit to repairs, your phrase will allow you a right to cancel if items are found that could affect the condition or value of the property. It then allows you proper room for re-negotiations for resolution.

Buyers assume that everything should be fixed and the seller always claims it worked fine for them and they cannot see the reasons for the buyer’s complaint. The bottom line is these small arguments create the biggest problems for the smallest amounts.

Buyers assume that everything should be fixed and the seller always claims it worked fine for them and they cannot see the reasons for the buyer’s complaint. The bottom line is these small arguments create the biggest problems for the smallest amounts.

Therefore, it is my recommendation to tighten up the cost or estimates before you enter into escrow. I have seen repair lists as small as $10 and as large as remodeling the entire house, but in all cases it creates a difficult negotiation, so if it is solved up front we have a cleaner more acceptable transaction.

Those of you who have encountered these issues will agree that repairs can be the most argumentative aspect of the sale. Realtors forget sometimes that negotiation of the price in the seller’s mind means, “I’m done,” don’t ask for anything else.

Then comes the list, and all heck breaks loose. That is why I suggest you negotiate specifics in the contract and do not leave anything for subjective evaluation after a price has been set. Save the headache.

Yes, the sellers think it’s over, and the buyers see an opportunity. The amazing thing is parties threaten to cancel escrow over minor issues and forget the bigger fact that they entered into contract because they liked the property and neighborhood and for the lack of specifics will cancel due to minor repairs.

Repairs the seller thinks have been properly negotiated in the acceptance of the buyer’s price and terms. That is why I say repairs are the most commonly misunderstood and biggest problem when purchasing a property without being extremely specific as to who will be responsible and at what value.

As always, when purchasing real-estate seek out the opinion of a professional and always interview them to ensure they are qualified.

TOM IOVENITTI is the former president and chief operating officer of Coldwell Banker. He lives in Newport Beach.