Concessions in real estate transactions

As the not-so PC expression goes: “It ain’t over ’til the fat lady sings!” Depending on whom you ask this is never more applicable than in real estate transactions. The terms seem clearly defined: inspection period of “x” amount of days. However as I have seen in more than a few cases, inspection periods and “as is” contracts are viewed as more of a guideline than a legally binding agreement by some. Another common phrase: “Everything is negotiable.” So which is it? Are both true? Is everything negotiable even up until the closing date? Well the answer is no… and yes. It all depends on the transaction and the parties involved.

Here is how it is meant to go: A seller allows a buyer a period of time in which to conduct their due diligence. This could be a septic inspection, a termite inspection, roof inspection, heck, you could probably bring a psychic out to the home you are buying during the inspection period to make sure the “energy” is good if you wanted. So ideally you conduct your inspections during the mutually agreed upon period outlined in the body of the contract. After that period ends, technically no further concessions are to be negotiated, unless say it is a financed deal and the lenders appraiser discovers a previously unknown defect and or the home suffers damage which was not there when it went under contract. After all one thing is for sure: The seller must deliver the home to the buyer in the same condition as it was when it went under contract. Read: Sellers must maintain their properties during the contract period.

But I digress. The point I was making is this. The inspection period is the time to make any repair requests. If a buyer waits until after this period is over, the seller does not have to acquiesce. Again, should a tree limb fall on the roof and cause shingle damage the seller would be obliged to repair it. But if you are buying a home and decide after your inspection period has ended suddenly you would like the carpets cleaned and a new air conditioner, well, don’t hold your breath. As long as the home is in the same condition as when you bought it, the seller may consider your requests and decide to comply, but they are not required to do so per the terms of the contract. This is the part of the article where I remind you I am not an attorney and if you’d like legal advice to find one.

Now that I’ve gotten that bit out of the way, lets tackle what an “as is” contract means. Its quite straightforward actually, the home is sold as it is where it is, meaning no repairs. Most known for adopting this practice are the banks. Foreclosures will always brandish the “as is” warnings anywhere they are listed. The banks are making things very clear; they don’t want to fix the items you may find on your report! Of course they can consider your requests and if it is a repair they deem reasonable and likely to be a concern expressed by any other buyer perhaps they will do it. But buyer beware. Don’t enter into a contract on a foreclosed home expecting an extreme home makeover only to be disappointed when Ty Pennington doesn’t show.

And the same is to be said on a traditional sale. The entire point of an “as is” contract is that the buyer is telling the seller they will not ask for repairs and will buy the home as it is. But if you are buying and must ask for a repair on an “as is” deal, make sure to do it during the designated inspection period if you’d like to have a chance.