It is very common for a buyer and seller to negotiate a seller credit in lieu of repairs after a buyer does a home inspection. Most sellers do not want to bother with doing a small amount of repairs, and some may not have the money until after they go to settlement, so they negotiate a credit and offer to pay some money at settlement for these repairs. The problem comes when the Realtors word this incorrectly in the contract and end up causing last minute problems.
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I sometimes have clients ask me how they can reduce the amount of cash they need to pay towards the purchase of a new home. Recently a client who was making an offer on a house that had an asking price of $650,000 wanted to make an offer of only $600,000 figuring that since they were putting 20% down, they’d save $10,000 by paying 20% down on $50,000 less in price. However, the house is worth what it is worth, and Read the rest of this entry »