When Should You Ask for a Credit in a Los Angeles Real Estate Purchase?
Finding the perfect home is very difficult. You have to deal with all kinds of Los Angeles real estate sellers, make various offers and spend a lot of time on the field. After you find the home you want to buy, you will have to spend some more time on negotiating and making offers. At this point you should ask yourself whether you have a deal or not. If you’ve made the down payment and signed the contract, it does not necessarily mean that you have the home. For example, there might be another negotiation round. In this case, you could need a last – minute credit. Here is what you should know about these credits.
Most of the credits rely on property inspections. These inspections are provided in your real estate contract. Thus, you can ask for an overall property inspection. At the same time, you can have detailed inspections of the roof, the pool, the sewer line etc. Some Los Angeles real estate buyers even ask for mold or termite inspections. All these inspections are performed after signing the contract or writing the offer. Therefore, they might bring to light serious problems that were unknown for the buyer. The purchaser might want to continue with the sale even though the inspection revealed important issues. The necessary repairs will call for a re-negotiation of the contract and the price. This is when the credit comes in handy. The buyer can receive a credit of up to 3%.
Some of the sellers will try to take care of all the repairs before closing the escrow. This way, they will avoid giving the credits. The seller will try to make such an agreement with you or a contractor so as to protect himself. Most of the times, the buyer asks for a credit so as to diminish the final price. He might never use the money to make the repair. This is detrimental for the seller. However, the majority of the Los Angeles real estate buyers try to do this. They get involved in long negotiation rounds to bring down the price. If this is not possible, then they ask for an inspection. They’re empowered by the contract to do so. Moreover, they have the loan approval and the closing is just a couple of weeks away. Also, they rely on the fact that the seller won’t give back on a few dollars. Most of the times he won’t, but they have to make sure that they’re purchasing on a buyer’s market. If it’s a seller’s market, the buyers might not be that lucky.
When it comes to the sellers, in order to avoid the credits, they should perform a property inspection prior to listing the residence. So, if you’re a seller, you must do your best to stay away from too many negotiations. Performing a property inspection might help you do so. A property inspection is also mandatory when you know that the residence has faults. Finally, if you’re a Los Angeles real estate seller, you should not totally avoid the negotiations. Leave a cushion so that you allow the buyer to ask for a lower price or even a repair work and at the same time to make sure that you won’t lose any money. Credits aren’t always bad; you just have to know how to turn them in your favor.
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Darryl West
dwest@powerhouserealestate.net
Author, Speaker and Broker at Powerhouse Real Estate.
