The C.A.R. purchase contract designates a 17-day contingency period.
This enables the buyers to conduct investigations about the subject property and review all pertinent information about what they are buying. It also allows time for the appraisal and loan approval to be completed. At the end of the 17th day, buyers are asked to release all contingencies, and put their deposit at risk. Should the buyers cancel escrow after signing off all contingencies in writing, the deposit goes to the sellers.
How the agents handle this process makes the difference.
Most dig in for the battle, figuring that their job is to defend their clients’ honor at all costs. When you see properties coming back on the market 15-20 days after you saw them go pending, you know what probably happened. It’s embarrassing really, that we can’t all just get along, and handle this part of the contract efficiently.
The sticking point always seems to be whether the repairs requested are worthy. Sellers and listing agents go into evaluation mode, and quickly discard the expensive repairs and opt for a couple of cheapies. Unless the buyers are in love with the house, the fight is on.
My alternative solution:
1. On Day One, the listing agent tells the sellers that there is a second negotiation coming, and to expect that the buyer will want more.
The euphoria of getting an accepted offer wears off quickly, and once their home inspector tells them that the house is falling down, buyers will want retribution. Buyer’s remorse is a real event, and this is where it rears its ugly head. But if the sellers and listing agent expect it to happen, then there is no big shock or upset when the buyers come back with their requests.
2. Settle on a credit, rather than actually fixing stuff.
This saves a lot of aggravation for both sides in trying to determine exactly what fix is needed, and if it was done properly. Sellers are notorious for cutting corners, and/or running out of time with their move. Make it easy on both sides, and arrange a credit to be applied towards the buyers’ closing costs.
3. Don’t worry about whether the credit will be the exact amount needed to fix stuff.
Sellers want to get quotes for repairs, turning the battle into whose contractors are right about the costs. This can drag out for days or longer – but it is much more effective to come to a quicker conclusion. Buyers are feeling vunerable, and if this battle turns into full turmoil, you can lose the deal over trival items.
MAKE THE DEAL – know this process is coming, and handle it promptly so it doesn’t fester. You’ll never see one of my listings have a problem on this topic, because I’m all over it. Giving this process the respect it is due is half the battle – yet many listing agents want to shrug it off.