Severe inventory shortages, multiple bids from multiple buyers and high demand have put sellers in the driver’s seat in housing markets around the country for quite a while now. It almost has been A Field of Dreams kind of scenario for sellers…just list it and buyers will come…at the list price or
above and with “as is” no concessions expectations.
This seller’s market scenario may be changing just a bit, however. We’ve just experienced a drop in the number of homes sold in both June and July. Buyers may be hitting a lack of affordability wall. And historically low inventories may be pushing buyers to stay where they are unless sellers are willing to “give” them exactly what they want.
What is reasonable for buyers to expect from sellers in terms of concessions when negotiating a deal? And what is unreasonable?
1. It is reasonable for the buyer to ask for termite and roof clearances. The seller most usually pays for new or repaired roofs. The seller usually pays for termite remediation where damage has already occurred; the buyer usually pays for termite remediation where damage may occur if left unmitigated.
2. The buyer has every right to expect that the primary systems in the house (electrical, plumbing, HVAC, foundation) be functioning. If they are not, the seller usually pays to get these systems up to speed.
3. It is completely unreasonable for the buyer to ask for and expect the seller to pay for any upgrades in the house. Older homes were built in accordance with and complied with older building codes. New electrical systems, for example, are the responsibility of new owners.
4. It is not reasonable for buyers to ask for abatement from the seller even when things like asbestos, lead-based paint, mold, etc. are discovered and disclosed.
5. It is not reasonable for a buyer to ask a seller to make any cosmetic changes in the home.
Words to the wise…make sure that you as the agent and your client are always realistic and courteous during the negotiation process. Without realistic expectations and courtesy, what is reasonable and unreasonable becomes irrelevant.