When do we stop negotiating?
Ask Phyllis! A blog series of frequently asked real estate questions. Have a question about real estate? Email us here
Dear Phyllis,
I had six bids almost immediately after getting my home on the market. I accepted the highest, which I am now regretting. The buyer’s agent is from Orange County and never shows up for inspections, but that’s another story. We extended our 30-day escrow, giving the buyer another 14 days. After the 14 days passed, the buyer’s agent notified my agent that the buyers now want me to pay $5,000 in buyer closing costs. I had already made a few repairs after the buyer’s inspector nitpicked the home to death. When do we stop negotiating? JL
Dear JL,
You have several issues to address. First, why isn’t the buyer closing? If the buyer has loan approval, your Realtor needs to review a written copy of the loan approval. Or you may need to move back to square one if not. Have your Realtor contact each agent who wrote an offer. Fortunately for you, it’s a seller’s market, and likely most of the buyers may not have yet found a home.
Take a look at the Residential Purchase Agreement that you and the buyer signed. Likewise, there are typically contingency periods in this contract. The buyer was allowed a certain number of days, typically 5–17, to remove their investigative (inspection) contingency and typically 21 days to remove their loan contingency. Once removed, you stop negotiating.
Most purchase contracts require buyers to remove their contingencies in writing. However, buyers and their Realtors often fail to remove them on time. In these situations, the seller’s agent should send the buyer’s agent a Notice to Perform, which requires the buyer to remove the applicable contingency in writing.
Only after the buyer removes all contingencies can the seller make a claim to the buyer’s earnest money deposit. If the buyer has not removed contingencies more than 45 days into escrow, I recommend that you raise the issue with your agent and, if necessary, the agent’s manager.
If the buyer attempts to renegotiate the purchase after six weeks in escrow, you can decide how to respond. However, you have no obligation to agree to any changes.
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How much access is the buyer allowed for inspections
Seller didn’t make agreed-upon repairs
Personally I think it’s pretty darn nervy to try and renegotiate terms after the deal is done. These buyers are betting the sellers don’t want to go back to square one and are trying to take advantage of that
I agree wholeheartedly with you