Quick Help: House Buying

[readyin07]

We have an accepted offer in on a house. There a million pros and cons to the purchase I won't go into, but the offer is at the top of our budget.

We negotiated $331k on the house. On inspection there are lots of little things "wrong" with house. Nothing major structural, but things that we will need to address. A broken roof truss, broken bathtub drain, leaky air conditioning and some small leaks in the pool. We countered with a $4,000 seller's concession so that we can address the repairs ourselves (we are using 60% of our liquid cash on downpayment and closing costs on the house...25% downpayment).

The sellers countered back saying they would give us a $4,500 concession BUT we had to renegotiate the purchase price of the house at $335,000. I don't like it. Adding that to the downpayment is $1k, which brings our concession down to the equivalent of $3500. Plus we have to figure in paying interest on that amount.  And I am not sure if that would impact  insurance / taxes.

What is aggravating me is that the seller appears to be conceding very little here. And I know too much. The sellers own 8 properties in our county. In June, they bought and moved into their current home. A $1.5 million waterfront home that they furnished outright (they left every piece of furniture, closets full to bursting, all their plates, tons of food...it is very strange). They are the home's original owners and they built the home so everything they are getting is profit in their pockets. The money means more to us than it does to them. DH is right that I'm too emotional about this and it shouldn't factor into my thinking, but I'm human and it does.

What does money matters think about their offer? 

[bryantpark]

Do you live in a hot market? This would not fly in our area as most people are even waving home inspections these days. You essentially would get no concessions at all here.

[mskitkat]

Are you friends with the owners? Is there a reason you would think they would do you a $4500 favor?

[sjh722]

Aug 31, 2014 8:29:14 GMT -5 bryantpark said:

Do you live in a hot market? This would not fly in our area as most people are even waving home inspections these days. You essentially would get no concessions at all here.

Not to mention that most lenders will not allow repair credits on the HUD. Is this a closing cost credit instead?

You have way too much information you're looking at. Take your down payment and earnest money out of your calculations. (Except for to figure if you have enough cash on hand to actually make the repairs.)

Also, what you know about the sellers is irrelevant. 

[konapoppy]

This is a business interaction. Either agree to their counter, counter again, or walk away.

I know it is hard. If you think YOU will forever feel like you got a bad deal and took advantage of you, don't accept their counter.

Good luck!

[pamela]

Their financial situation has nothing to do with the value of the house.

[pamela]

And I would not raise your financed amount to pay repairs when you are putting down 25%.

[littlemermaid]

Personally, I would walk away. The list of repairs you listed will most likely exceed the amount you want for a concession.  It makes no sense to me to raise your purchases price if you want them to give you a concession.  If you raise the purchase price then you aren't getting any type of concession at all.  Just walk away and keep looking.

[readyin07]

We are in South Florida and the market is busy. It is definitely more a seller's market. But the home had been on the market for two months without an offer. Homes here that are right priced are selling fast. We live in a hurricane prone area. Anyone who didn't get an inspection would be a complete idiot.

It is a closing credit. I don't see it as a favor. They have under maintained the home and it shows. Repairs not done right the first time, a few things not done to code. If they wanted full asking they should have addressed those issues themselves. I guess what I am struggling with is not seeing how their counter is them giving up much of anything besides $500 and whatever their capital gains would be on the new amount. And yes their financial situation doesn't impact mine but I can't make it unknowable.

[sjh722]

Aug 31, 2014 8:50:03 GMT -5 readyin07 said:

We are in South Florida and the market is busy. It is definitely more a seller's market. But the home had been on the market for two months without an offer. Homes here that are right priced are selling fast. We live in a hurricane prone area. Anyone who didn't get an inspection would be a complete idiot.

It is a closing credit. I don't see it as a favor. They have under maintained the home and it shows. Repairs not done right the first time, a few things not done to code. If they wanted full asking they should have addressed those issues themselves. I guess what I am struggling with is not seeing how their counter is them giving up much of anything besides $500 and whatever their capital gains would be on the new amount. And yes their financial situation doesn't impact mine but I can't make it unknowable.

Then counter back.

They see this as a business transaction, which it is. If you're going to be ticked over $500 for the next 30 years, then walk if they won't take your counter.

What advice has your agent given you? He/she does this all the time and knows your market better than strangers on the internet. 

[kadams767]

Aug 31, 2014 8:50:03 GMT -5 readyin07 said:

We are in South Florida and the market is busy. It is definitely more a seller's market. But the home had been on the market for two months without an offer. Homes here that are right priced are selling fast. We live in a hurricane prone area. Anyone who didn't get an inspection would be a complete idiot.

It is a closing credit. I don't see it as a favor. They have under maintained the home and it shows. Repairs not done right the first time, a few things not done to code. If they wanted full asking they should have addressed those issues themselves. I guess what I am struggling with is not seeing how their counter is them giving up much of anything besides $500 and whatever their capital gains would be on the new amount. And yes their financial situation doesn't impact mine but I can't make it unknowable.

Then you should counter back to them. Are you willing, at this point, to let them address the issues and fix them?

Only you know how much you want the house and if it will be worth the extra money to you. I do wonder the reasoning behind putting down 25%. Personally, I'd drop the down payment to 20% and use the remainder to do the repairs if you decide to move forward. I think it is rare to find a house that won't need some sort of repair, honestly. Most sellers do not remedy all maintenance issues or fixes or provide concessions for them and it's kind of unrealistic if that is what you are expecting, IMO.

[readyin07]

We countered at 333,000 with the concessions on realtors advice. I just don't want to feel like we are getting screwed. We made that mistake once.

[readyin07]

So it is bank mandated that we put down the 25percent bc we still own another property. We will rent it but the bank doesn't factor that in until you have a few years rental history under your belt so we get a higher ratio. If we were selling, we could do 20percent (or less). Our house was underwater and we are just emerging from that. Rental market in our area is very good so we can rent it at a little higher than break even point with our mortgage. Hoping for a year or two of that so we can sell with a little profit or at least breaking even after we deal with commissions.

[cinnamoncox]

Not sure where you are, but here it's a sellers market. People aren't even getting home inspections (only for informational purposes), nevermind seller concessions.

And what they own has 0 to do with this transaction.

If you like the house, pay the $335k, if not, walk.

Good luck, it's a hard decision sometimes.

[AAM2012]

Aug 31, 2014 8:50:03 GMT -5 readyin07 said:

We are in South Florida and the market is busy. It is definitely more a seller's market. But the home had been on the market for two months without an offer. Homes here that are right priced are selling fast. We live in a hurricane prone area. Anyone who didn't get an inspection would be a complete idiot.

It is a closing credit. I don't see it as a favor. They have under maintained the home and it shows. Repairs not done right the first time, a few things not done to code. If they wanted full asking they should have addressed those issues themselves. I guess what I am struggling with is not seeing how their counter is them giving up much of anything besides $500 and whatever their capital gains would be on the new amount. And yes their financial situation doesn't impact mine but I can't make it unknowable.

A LOT of people are buying homes in my area (Tampa/St Pete area) without getting inspections. The few things you listed seem to be relatively minor in nature. Have you priced out how much it would be to fix these items? Maybe $500 is a reasonable amount? (I have no clue) but I would think you would have more room to negotiate if you had a realistic price as to what it's going to cost you to make these repairs.

Like others have posted, their financial situation is none of your business and has no bearing as it relates to buying their home.

Good luck!

[bryantpark]

Aug 31, 2014 10:05:28 GMT -5 cinnamoncox said:

Not sure where you are, but here it's a sellers market. People aren't even getting home inspections (only for informational purposes), nevermind seller concessions.

And what they own has 0 to do with this transaction.

If you like the house, pay the $335k, if not, walk.

Good luck, it's a hard decision sometimes.

We are listing Wednesday! Eek!

[AAM2012]

Aug 31, 2014 17:56:22 GMT -5 bryantpark said:

Aug 31, 2014 10:05:28 GMT -5 cinnamoncox said:

Not sure where you are, but here it's a sellers market. People aren't even getting home inspections (only for informational purposes), nevermind seller concessions.

And what they own has 0 to do with this transaction.

If you like the house, pay the $335k, if not, walk.

Good luck, it's a hard decision sometimes.

We are listing Wednesday! Eek!

We were under contract in 4 days and that includes the 2 days it took to get our house pics online.

[fryjack2]

Aug 31, 2014 17:56:22 GMT -5 bryantpark said:

Aug 31, 2014 10:05:28 GMT -5 cinnamoncox said:

Not sure where you are, but here it's a sellers market. People aren't even getting home inspections (only for informational purposes), nevermind seller concessions.

And what they own has 0 to do with this transaction.

If you like the house, pay the $335k, if not, walk.

Good luck, it's a hard decision sometimes.

We are listing Wednesday! Eek!

Are you in MA?  Is the home you are listing in Brookline or Newton? Or a 2+/2+ in the South End, Back Bay or Beacon Hill? If so, please PM me

[bryantpark]

Aug 31, 2014 20:52:54 GMT -5 fryjack2 said:

Aug 31, 2014 17:56:22 GMT -5 bryantpark said:

We are listing Wednesday! Eek!

Are you in MA?  Is the home you are listing in Brookline or Newton? Or a 2+/2+ in the South End, Back Bay or Beacon Hill? If so, please PM me

No wish I was! North of boston.

[fryjack2]

Aug 31, 2014 21:03:47 GMT -5 bryantpark said:

Aug 31, 2014 20:52:54 GMT -5 fryjack2 said:

Are you in MA?  Is the home you are listing in Brookline or Newton? Or a 2+/2+ in the South End, Back Bay or Beacon Hill? If so, please PM me

No wish I was! North of boston.

 I have good friends trying to get us to move to Andover.  I'm not ready for the burbs so its a good thing you said no

[bryantpark]

Aug 31, 2014 21:19:34 GMT -5 fryjack2 said:

Aug 31, 2014 21:03:47 GMT -5 bryantpark said:

No wish I was! North of boston.

 I have good friends trying to get us to move to Andover.  I'm not ready for the burbs so its a good thing you said no

We are much closer than that!

Also op sorry for the thread jack.

[ohyouknow]

The reason they are offering to put it into the purchase price is you can then finance the extra expense and they give you the concession in cash to make the repairs immediately. IMO you are being unreasonable. I think things like a broken bathtub drain are silly and if I had a buyer complaining about that I probably wouldn't allow them a concession unless I was desperate to sell. They might have a lot of money (seemingly at least) but that shouldn't factor in your decision. If they were struggling would you pay them more for the house?