A Simple Mistake in Offer Negotiations Can Cost Thousands
I was reading one of Mark Weisleder’s columns in the Toronto Star about a woman who lost $46,000 in a home purchase deal gone wrong. She didn’t even have a house to show for it at the end. In my experience, most buyers assume that everyone is nice and always fair. Wouldn’t that be great? In reality, that is usually the case but certainly not in every situation. Nor does every buyer or seller always have the best representation protecting their interests.
Mark’s column raises a very good point about having a seller do repairs and why it may not always be a good idea. Let’s say a Buyer has a conditional offer pending and a home inspection reveals that there is a gas leak in a line to the furnace. In that case, it would be pretty obvious that the seller should address and have that repaired immediately for their own safety. On the other hand, let’s say the inspection reveals a small leak in a basement. What should a buyer do? If they ask the seller to have the item repaired, the resulting work is out of the buyer’s control and may not be done to their expectations. In such a case, if there is no risk of immediate further damage, it may be wise to have experts review the problem, provides quotes and let the buyer take it on after closing and have the price adjusted in the offer.
This story got me thinking about another situation that is not really that uncommon. What if something breaks down in between negotiation of an accepted offer and the subsequent closing date? For example, what is the furnace quits or the fridge breaks down? One would assume that the seller would be forced to repair the items before closing however, the law is not always in agreement. A judge may order a buyer to close because everything else is fine and then it would be up to the buyer to sue the seller AFTER the deal closes. One way to lessen the buyer’s risk is to ensure that a clause regarding the chattels and fixtures being in good working order on closing is included in the Agreement. It makes the condition of those items an actual term of the agreement.
When it comes to real estate, making assumptions is not a good idea. An Agreement of Purchase and Sale is a legal document and there are thousands of laws, precedents and statutes that can impact a transaction. Both buyers and sellers should ensure that they have the very best representation and advice possible from both a REALTOR® and lawyer through-out the transaction. Not doing so could cost you thousands of dollars.
It’s always a pleasure to meet new people and to assist them in meeting their real estate goals. If you would like to schedule a buyer or seller consultation with me, please feel free to email me or call at 705-446-1762.