Saturday, May 10, 2008

What a Day!! More House Updates

Well, we got it right.

Our final offer and the offer of the other buyers were almost IDENTICAL, down to the closing date.

We had these two small advantages:

1. They liked our letter :-).

2. We had offered a higher down payment, making things a bit more secure. Actually, I put in for a higher down payment than our own agent had first suggested, as I wanted to make this a competitive offer and had a strong feeling, given the high interest in the house, that this kind of thing might be coming into play.

So they leaned toward putting us in first position.

Only problem is that we had marked that we were going to do a lead inspection. In our state, once an inspection is done, it goes on state record and by state law you MUST get the lead removed. From their perspective, the concern was that if the sale fell through at some point before closing, they'd be stuck with a lead record on file at the state and obligated to deal with it.

So they asked if we would be willing to put off the lead inspection until after the closing. Eyyyyeee! This made me nervous.

If we said yes, that we would put it off, we'd go into "first position," they'd accept our offer, and the other buyer would be the backup. But, it would also mean there would be no possible negotiation for shared cost toward lead abatement, and worse...that we wouldn't be able to back out from the house if we find out the abatement would add up to $50,000 or something! Once we buy it, we are after all, sort of stuck with it.

If we said no, that we needed the inspection done pre-sale, it would mean they'd put our offer in as a backup offer and accept the other buyer's offer. So, quite possibly, we wouldn't get the house.

I quickly called a de-leading agency and got a cost range that is typical for houses of this age and type in this condition in our area. Of course it can vary, widely, so I asked about best and worst case scenarios.

Then I called the foster licensing office, and they said they are not currently requiring de-lead certificates. The woman I spoke with basically indicated that we'd be okay. She just warned me that I would be legally liable if any child in my care got lead poisoning (and they DO do regular lead testing here on all children by law).
She said to make sure that all potential sources of lead were as encapsulated as possible, and to check through the house during the other inspections and make sure that as many things as possible were updated, ranging from replacement of doors and windows to no peeling paint, etc...I think we should be okay on that front (the house has almost all new windows, etc.). We should even be able to avoid an inspection entirely.

So we told the sellers that yes, we'd hold off on the lead inspection, if we end up doing it, until after closing.

They also asked us if we knew about the fact that the roof is old (we had a good feeling it was) and if we knew about the asbestos in the basement (we appears that it is likely all encapsulated). We said yes, and then we received word that they would be accepting our offer.

At 10 minutes before 5pm, I got the fax signing off on our ammended offer. But they also added "All home inspections are for informational purposes only," and were asking for our initial of agreement.

Wow! We weren't expecting that. Talk about elation followed by complete confusion. Say what?!
We pressed the pause button.

I went and talked to our agent in person. Basically, the sellers have a backup offer, and more folks eager to write offers. The house has been shown non-stop since going on the market. They don't feel that they need to get involved in a bunch of petty negotiations after inspection.

Honestly, even if they didn't put that sentence in there, they'd have a total and complete upper hand in negotiating because of the interest in the property and the secure back up offer. So even without the statement added in, its not like successful negotiation is much of a possibility for us in any case.

That said, though the bid document does later state that we have the right to withdraw our offer based on an unsatisfactory inspection within a two day period after the inspection, I felt that the add-in sentence was contradictory, and I didn't want any legal questions to arise about whether one nullifies the other. So before intialing, I wrote in: "However, buyer has the right to withdraw offer based on any unsatisfactory home inspections." Precedent in real estate law should cover the rest. I just felt that my addition to their unexpected addition was a safety measure.

Of course, if there is a major issue (like say, if there is termite damage to the house), as my agent explained today, we'd still try to negotiate it. The fact is, if this was discovered, the sellers would have to take care of it, whether we were the buyers or not. They'd have to disclose the finding to the next buyers, and it's not like a bank would fund a loan for a house with termite damage, so the next buyers aren't likely to pick up the sale at that point. So, *that* kind of thing-- the major stuff-- we'd still be in a position to push a little.

But anything else that might come up during inspection, we have to decide whether it is worth the low-for-area-and-condition-of-the-house sale price or if we will need to pull out.

As seems to often be the case in selling and buying homes, it now "all comes down to inspections."

Awe, more nail biting.

I am sooooooooooooooooo now on the edge of my seat.

All that said, this does take the anxiety of more negotiations ahead nearly out of the picture. After some reflection, I am realizing that knowing the seller's bottom line actually puts us in a more secure position.

Plus, this should go quickly...we wrote into our original offer that we'd do inspections within seven days because we felt it showed in good faith that we wanted this to move fast. Only seven more days, and we'll know if we can move forward or not. Then, if we can move forward, all we have to worry about is financing...and THAT, we will indeed!!

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