Don’t Let a Good Deal Die

Two factors to keeping any deal together:

Communication & Negotiation

Most common Reason Deals Fall Apart- INSPECTIONS!

Setting Expectations and having conversations For your buyers from the beginning is crucial. Educating them on what items are important to look for/ notice at showings prior to submitting offers and at inspections is something you should be comfortable doing. Every house is likely going to have some issues, sometimes the report will be long and scary to the unfamiliar buyer. 

Conversation before the inspection:

Good Afternoon (Buyer), 

I wanted to take a few minutes to collaborate and let you know what to expect for the home inspection we have coming up this week. You, the inspector, and myself will be at the property for a few hours. During this time the inspector will look over the home top to bottom inside and out. They are going to look at the overall condition of the property, check the structural functionality of the mechanicals, and do some testing of the electrical and plumbing systems. It is the inspectors job to make note of all their findings and in the end put them into a report they will send to you. This report will be 50 + pages, and this is completely normal. While most of the information in this report is for you to learn about your new home, when we get this report we can decide if potentially there are any safety, structural, or health hazards we may want to negotiate with the sellers on having them repaired. This is your time with the inspector so please feel free to ask them questions you might have as they are going through the house. 

Any other questions you have on this now? I know this is a lot of information so I am going to send you an email recapping all of this as well. 

Email Template (To be sent AFTER you have the conversation):

Hello (BUYER), 

I am sending this email as a followup to our conversation earlier. We have inspections scheduled for (date/time). Please plan on being at the property for several hours. The inspector will take a thorough look at the property inside and out, providing you with a large report of all findings typically 1-2 days later.  Do Not hesitate to ask the inspector any questions you may have as they are doing their inspection.  Once completed and we have received the report back, a round of negotiations may take place if there are any structural, safety, or health hazards you would like rectified. 

Please let me know if you have any additional questions on this process. 

The post inspection Conversations:

At the END of the Inspection- 

Are there any additional questions you have right now before we leave the property? Let’s connect on this again tomorrow when we have the full report back from the inspector. I do like to plan 30 minutes -1 hour to talk over the findings and discuss what our next steps in this process are.

The Conversation when you have the Report back- 

Looking at the report  What, if any, are the top 3 items you would want to have looked at further or have repaired to make you most comfortable with your purchase?

Let's keep in mind, the sellers are not obligated to make any repairs at all if they don't want to. We want to make our request as appealing as possible, while making sure that you are happy and confident in the purchase you are making. I can let you know from experience that if you focus on a few items that are most important to you, the seller is more likely to want to work with you to get these items repaired. If we send a laundry list of items the sellers may overlook those items that really mean most to you. Does that make sense?

The Negotiations:

Take the time to talk to your MENTOR/ COACH (mandatory on your first 6 deals if a leads agent) before entering negotiations to get additional ideas on what your options are:

• Repairs

• Credits

• Price Reduction

Try and Keep your list of repairs to any major issues that arose that they did not take into consideration when writing their offer that they would like to ask the seller to have repaired. 

Consider sending additional items found during the inspection that your clients are NOT asking for- Sellers may be more likely to do what you want when they know your clients were not picky. 

You can get quotes for the items the buyers want fixed, the cost of these repairs might be much different than all parties were thinking. Maybe seeing costs will make sellers more willing to or maybe the total cost of these repairs is something the buyers are okay with taking on the costs of themselves. 

You can try negotiations with AS IS or informational purposes only if there are MAJOR issues- Don't just terminate, HAVE THE CONVERSATION> 

Appraisals; another common reason deals are terminated:

Once negotiations are completed and an agreement is in place for repairs, credits, ect post inspection it is time to have the home appraised. We Let the lender know we are ready for an appraisal and they will order it. 

The appraiser meets with the Sellers Agent/ Seller and after looking over the home and taking into consideration sold properties for comparatives they will assign a value to this property. 

Once Appraisal is completed the mortgage lenders will receive a report outlining the value that has been assigned to the property. If the home appraises at or above the price that we are offering to pay for this property there is no need for any further negotiations. 

IF for any reason the home appraises below the price which was offered on the property there is going to be another round of negotiations trying to come to a mutual agreement with the sellers on price of the property. 

• Price Reduction to the appraised value

• If the buyer has the funds they can pay cash for the difference in price between the appraised value and purchase price. 

• A middle ground where the sellers reduce the price some and the buyers come up with some funds to make up the difference. 

Keep in mind your loan types

Setting the expectation of this before submitting the offer(verbiage in offer)

VA/FHA loan required repairs come up at appraisal, not inspections.