Los Angeles Sweet Digs

July 19, 2008

Note To Buyer: You’re Going To Walk Out Over Flashing?

flashing Note To Buyer: Youre Going To Walk Out Over Flashing?

Are you serious? Last time I posted about the pending sale of my house, I mentioned the inspection went well and that I was looking forward to a smooth closing. Well, things never really go so perfectly. I recently received a list of requested repairs and I wasn’t very excited about it.

By the way, I doubt the buyers are reading this, but if you are – all I can say is “hello.”

Here is the list so that you all can be part of my experience.

1. Install sidewall metal flashing on roof between sloping roof on house and garage.

2. Repair termite/wood rot on east facing window sill.

3. Correct electrical drop hazard on roof.

4. Replace outside electrical panel with UL approved panel.

5. Service/clean floor furnace.

So here were my thoughts.

1. The flashing would be installed in this case as a preventative measure and is not something that is typically done by a seller from what I understand – especially when there has been no damage nor any imminent threat of damage from water. (In other words – not my problem.) Even the inspection report notes that there is only a “chance of water damage”. (I also have a chance of winning the lottery.)

2. This one is a non-issue because it gets covered when I have to do work on the house overall per the termite inspection.

3. I’m going to call the electrical company and see if they’ll make any required changes.

4. See above, #3.

5. Fine. I’ll vacuum out the dog fur already. And yes, the heater does work. I got someone out to repair it early in the year.

So far, all I’ve heard is that the buyer really wants to get the flashing done. I’ve been advised that this deal may be dead if I’m not willing to pony up a few hundred for the flashing. (I used to draw details of those things back in my architecture days.) I’m thinking. Are you kidding? You’d walk for something that isn’t a safety issue and that is typically not a seller’s responsibility? I’d be surprised.

At the time I’m writing this, I’m waiting to hear back on their decision. Any reader comments on this issue are appreciated.

Stay tuned to find out whether I’ve called their bluff or whether I’ll be eating my words.

Posted by Christina Chan on July 19, 2008 12:45 PM | del.icio.us | Digg

  • Thanks for shedding some light on that Scott!
  • Hi Christina,

    I always recommend to my sellers that they get an inspection prior to putting their home on the market. This way they can be aware of any problems they might not of known about and remedy them before putting it on the market. In my opinion, it better to reduce the ammo that potential buyers will have against you to negotiate about. Buyers will typically ask for more money in credits than it could have cost you to fix minor repairs. Plus you reduce stumbling blocks that could halt a sale during the escrow period. The less reasons you can give a buyer to back out the better. I know several agents who recommend this to their clients.

    http://www.thewestwoodblog.com
  • Lorraine-

    I'm curious. When you say most transactions - are you saying you personally bought and sold or that you are involved in real estate somehow?

    I'm surprised that you actually fixed most of the things on the inspection list prior to getting the house on the market. (Did you have an inspection done before you even put it up for sale and why did you do this?) Most inspections are done by buyers after they have already put out a bid to buy and this bid is accepted by the buyer. And there is a lot of paperwork to get to that point. Sellers don't typically pay hundreds of dollars for this inspection before they’ve even put a house on the market.

    Also, my inspection is a list that is several pages long with many items noted on there. I find it hard to believe that any (if not most sellers) would have an inspection done prior to the sale of the house and proceed to make the repairs.

    When a buyer looks at homes, they are all at various conditions. Some are fixers. Some are well maintained. Some have structural damage. Others have good "bones". Buyers should be aware that they buy a house with a price tag according to what they know and can see about a home. Some homes come with non-permitted construction. Does a buyer bid on a house and then expect the seller to tear it down if there are no permits? No. Likely either the buyer decides to assume the risk or to walk away - long before he/she even puts down a bid.

    As far as another buyer? They will get a new inspection report which may detail many, but not all of the same things. Then that buyer may not ask for the same thing that the first buyer asked for. It is subjective. The buyer may want nothing changed. The buyer may have a longer list of requested repairs. You never really know.

    Also, when did I ever say I was walking away?
  • Lorraine
    In most real estate transactions I've been involved with, I expected repairs where the construction was sub-standard or incorrect. I also,as a seller, fixed most things that were on the home inspection list, prior to putting the house on the market. If I were the buyers, the electrical panel would be of equal concern. I would also expect the flashing to be installed, as it should have been. If you had the roof replaced recently, you could see if that is covered under the warranty as it should have been installed with flashing.

    If you walk away from this buyer, I assume any prospective buyers are going to see the inspections and disclosures and are just as likely to ask for the repairs to be done, wouldn't you think?
  • Thanks for your positive words, Phyllis.

    When I posted, I really wasn't expecting all this. People really have strong opinions on this! (That I should just cave.)

    I hope to be able to provide an update and more details soon, but can't yet. Things are still developing.
  • I am dying to know what happens. And the comments here are very interesting (and pretty much on one side - the buyer). It IS a buyer's market, but it still doesn't mean that the seller has to (or should) make every repair the buyer requests.

    Most buyers become emotionally involved with the home they are purchasing (and if they aren't maybe they shouldn't buy it). EACH party has a lot at stake - including the Realtors - the Realtors need to negotiate this because this is what they are paid to do -

    Good luck and let us know about your positive outcome.
  • Hi Jim-
    Yes. I agree with you. But usually, what happens in a transaction - based on my own experience and what I've heard - is that a buyer gives their repair list. A seller will give back their list of what they will or won't do. I hadn’t actually even returned my list of what I would and won’t do when I got this “hint” from my agent about the possibility of the deal falling through.
    I don't know off hand, but I would guess they probably spent over a thousand in inspectors and the appraiser. They used several inspectors.
    Also, the roof is probably about 6 years old. The inspector report shows that there is no damage. There is only a "chance" of future damage down the line. The water would not pool – it would run down the roof line. The risk of water damage is really remote.
    Sorry your offer didn't go through. : ) I remember back when I was looking and it was a seller's market. The second offer, which is my current house, was the one that stuck. And I was so very glad, because it was way better than the first one. Good luck in your search!
  • Jim
    Phyllis and Christina,
    While the seller is not "obligated" to make these repairs it again comes down to whether or not they want to close the deal.
    While we don't know all the other little issues that have come up like you mentioned Christina the flashing doesn't seem like a big deal.
    The reason why there may be little chance of damage is because it doesn't rain here much. However even a little moisture that seeps through after several good storms could cause long term damage. It can lead to rot, damage, etc..I don't think the buyer is unreasonable here.
    Ask yourself, who has more to lose..the buyer who has spent only a few hundred on a inspection, (and maybe appraisal at this point?), or you? You could easily get thousands of dollars less in your next offer and still get just as difficult a buyer.
    My money is on the buyer on this one. Swallow your pride if you want to sell this one.
    By the way, we made an offer and walked after a lousy counter offer. Sellers were to full of themselves..the house is still on the market and they are probably kicking themselves now.
    Good luck..keep us posted
  • To Carlivar-
    I'm not sure what your comment is in reference to?
    I think there will always be changes in the market that cater to buyers or sellers. But I think regardless of that fact, there are still standard practices that we use as guidelines.
    When it's a seller's market, I don't believe that we throw most everything out the window that protects the buyers in a transaction. By the same token, when it's a buyer's market, we don't suddenly decide that a buyer is accommodated at every request and turn.
  • carlivar
    The terms "buyer's market" and "seller's market" exist for a reason.
  • Lisa-

    Hi! Nice to hear from you and thank you. I find out today sometime.

    I'll probably do a later post, when all is said and done.
  • Phyllis-

    Thanks for your expert insight! We need a little reality check on what really is required and what is not when it comes to the transaction.
  • Lisa
    Congratulations and good luck with completing this sale Christina. At least now you know how many people read your blog!

    When do the buyers have to get back to you to wrap up this deal?
  • Real estate IS an "as is" as disclosed sale.

    AFTER the inspection, the buyer has the right to approve or disapprove the condition of the property and proceed or cancel escrow. The seller is not required to make any repairs - not health and safety none.

    The (non institutional) seller is required to disclose all known defects, but other than certain things such as smoke dectors, there is no norm. In addition, while customary the seller is not required to provide termite clearance.
  • To Said-

    I don't believe my particular case to be one that is an "As Is" sale at all. As stated above, I am offering to do 4 out of 5 requested repairs. There are no repairs that have been requested or are shown to be needed that affect health and safety. Additionally, I am complying with current requirements as far as low-flow, smoke detectors, etc.

    And I am doing substantial work - thousands worth per the termite inspection.
  • .
    seller may not be required, but isnt it customary for them to make certain repairs...particularly for health and saftey? it seems like what you are describing is an 'as is' sale,which i understand is quite different from a typical sale
  • Phyllis. Thanks again for that. I would be nearly alone in my thoughts on this board if it weren't for your comments.

    In life, as everything else, I have always negotiated things where possible - and I find that when you have a substantiated reason to back up your claim (it's corny, but knowledge is power), you can stand your ground.

    I also did not take the first bid that came to my home. (Yes, even in this market.) Because I knew what homes were going for in my area. I wonder how many folks on this board would have told me to just run with the first one. Assuming this one pulls through (and my "gut feeling" has not failed me yet.), I'll be glad that I went with what I thought was right.
  • Other than smoke detector and water heating strapping and any city requirements such as low flow toilets, shower heads, the seller is not required to make repairs.

    The seller is not delivering a perfect home. It is the buyer's agent's job to explain that fact. The seller is not required to repair health and safety items either.

    The purpose of the inspection is to educate the buyer - as to the condition of the home. It is not a "wish list" or a repair list. Christina, no one knows what will happen, but sometimes our instincts are right. Sounds as if this home buyer wants to buy... if they didn't they wouldn't have gotten this far. The buyers that don't want to buy aren't.

    Best of luck & keep us posted. And believe me - their Realtor does not want to get back in the car and start the whole showing process again.
  • To Question-

    I don't know of any official list. If you have an experienced realtor, they can point you in the right direction. Otherwise, my understanding is things that are not safety issues and are preventative measures are not typically the seller's responsibility.
    Good luck!
  • carlivar
    $300? Just pay it and think about what the inspector did not find that's more legitimate. There's always something.
  • question
    you say this repair is not one typically done by sellers. how do you know this? is there a list of repairs that are typically done by sellers and not done by sellers? i am curious because i will be presenting a list soon to the seller we are working with.
  • Kate-
    I realize there's no more point in presenting my case. Only time will tell what happens next.
    (Amended) But I don't think anything shows these buyers are necessarily enjoying the experience. Four plus months of shopping, going through bids, getting a loan approved, and paying hundreds for appraisers and inspectors is stressful no matter how you look at it!
    Cindy-
    The statement about flashing them is too funny! Thanks for that.
  • Christina, if I were in your shoes, I would not only pay for the flashing, I would flash them if that would ensure that I sold the house.
  • I think you will lose this buyer and not find another at the same price or even close.

    They seem to be enjoying the process and will certainly enjoy starting over with the next seller. There's nothing special about your house (in this market) - they know they will find another.
  • Red. You nailed my sentiments in a manner of speaking. I'm not much of a card player. I don't even know the rules to poker. But I liken a lot of the negotiations in this "game" to poker.

    Cheers!
  • Hi Ron-

    Yes. But an agent can (and has in the past) been able to do one of two things.
    1. Persuade his clients.
    2. "Help" the transaction along where there needs to be a financial tie-breaker.

    And yes, I know all about the market downturn. Even in my area by the beach. I do write about it after all. : )

    Which is maybe why I feel I know if I play my cards right, I don't have to/shouldn't have to make any concessions out of the ordinary.
  • RED
    I'm late to the conversation, but I will add this. It's important to remember that oft-brought up line here, that buying real estate is an emotional decision. As such, you can't trust anyone, buyers or sellers, to do what is objectively in their best interest.

    Also, there's the poker line: play the player, not the cards. Or something like that.
  • ron
    A realtor works as the agent of a buyer. He may not want his precious commission to slip away, but it's not up to him.

    Also, inspections and appraisals cost in the hundreds of dollars. We are talking about savings on the order of tens of thousands or hundreds of thousands of dollars. I don't remember where the house you are selling is located, but I think it was somewhere in west LA, right? The house we sold was in the Inland Empire. That area has seen huge price declines When I mentioned $250k earlier that was a decline from $432,000 to the most recent comp of $180,000. The higher end homes have yet to pay the piper, but it is coming. This is the reason that it is imperative that you get out now.
  • Hi Ron-

    Thanks for your comment. I guess most everyone here thinks it's a make or break deal. I guess I think differently than most folks here.

    If I were the buyer, I would not bid multiple times on a house unless I really wanted it. If I went through the trouble of getting an inspection done and having an appraisal done and going through the loan - I would not back out of a deal if the seller did not agree to giving me a say - $200 credit for an unnecessary upgrade - even in a declining market.

    Also, I believe there is a difference in being reasonably accommodating and agreeing to every term that has been requested. I haven't agreed to all their terms (much to their chagrin), but I have tried to be accommodating when I could.

    If I were the realtor, I would not – in this declining market, allow a deal to fall through so readily when commissions are scarce and the deal-breaker is a mere few hundred.

    No, I doubt that I will be losing out here. I may have to concede something, but I’m not “missing out” on an opportunity.
  • ron
    If they have been looking for four months, they have probably been noticing the downward trend in prices over that time. If I were in their position I would be feeling a lot of buyer's remorse. In addition to the timing of their offer, the fact that they had to outbid others may have them wondering if they are experiencing "winner's curse" as well. If I had to outbid others in a declining market and deal with a seller that was anything less than fully accommodating I would be looking for any reason to cut my losses and wait out further price drops.

    When we sold our house in Jan of 2006, I gave the buyers everything they wanted. I had someone on the hook to pay today's price when tomorrow's price was guaranteed to be lower. That model of home in the same neighborhood now sells for ~$250k less than what we got. You have the same opportunity now; don't waste it.
  • Thank you for that, Phyllis. Your words are more along the lines of what I was thinking. Buyer's market or not, they will not want to blow the deal over this. Nothing is set in stone, everything is negotiable.

    The buyers first looked at my home four months ago. So they've been looking at LEAST that long. And after paying hundreds for the inspector, the appraiser, going through the process of getting a loan approved etc. - not to mention that they bid and went up in price on the home at least 3 or 4 times (I've lost track already), plus the agent has put his sweat into this.

    I'm offering to do 4 out of 5 of the repairs and now we'll just sit tight and wait and see. I also gave them a pretty substantiated reason for why I didn't think the flashing was necessary, from a practical point of view as well as what are standard practices. I did not simply say I don't want to do this with no reason.
  • I think you can negotiate this AND I think the buyer expects you to - that there will be a compromise.

    Remember they have a real estate agent that has shown them homes (who knows how many and for how long); the buyer has paid for the inspector, the appraiser... I don't think the buyer or their Realtor want to start all over.

    Offer them what you think is reasoanble, but offer them soemthing - maybe 25% of the cost of their repairs. Most likely the temrite was already noegiated and you agfreed that anyway.
  • Hi Scott M.-

    Thanks for your comment.

    LA Guy-

    Do I want to sell, need to sell? Of course. Otherwise, I would never have put it on the market. I completely understand how a buyer would feel about my "stubbornness". However, you might be taking it from the standpoint of how you would have handled the transaction as a buyer.

    You really have to have experienced doing this transaction with these buyers for yourself to know where I'm coming from. (There. I've said it and I'll leave it at that.)

    For everyone – really, point well taken. I don't think this deal is going to really blow over this. They'll negotiate and I'll negotiate till we're both exhausted and then we'll probably come to some sort of agreement. We've been bantering about a lot of points through this whole process.
  • To Scott-

    Regarding "Is the title of this blog post directed at YOU or the buyers??"

    Point well taken.

    But I never threatened to walk. It was implied through my agent that the deal "may" fall through. There has always been a lot of back and forth in negotiating this sale. The argument about flashing isn't the first. As much as I'm digging in my heels, I'm not planning on doing anything that will absolutely blow the deal.
  • Hi Christina,
    I’m going to have to agree with the other posters here that you are better off fixing the issue the buyers are asking for and not risk them walking. If what you’re saying is correct and it’s only a few hundred dollar item, I would fix it in a hurry and move on with the sale of your home. The risks are far worse if this indeed pisses off the buyers and they walk. Then you will have to put your home back on the market hoping that another buyer will pay the current price. And if not, you may find yourself dropping the price more than what that couple hundred dollar item would have, just to make the buyers happy. I know you are proud of your home and you are trying to hold strong, but I think it’s wise to remove the stress and just fix the minor problem. Just my 2 cents.

    http://www.thewestwoodblog.com
  • Scott
    Let me get this straight.
    - buyers ask for 5 fixes
    - 4 of those fixes are entirely legitimate and easy
    - 1 of them the inspection report deemed as "may be some risk" and has "chance of water damage"
    - this remaining item is important to buyers
    - this remaining item is only a few hundred bucks
    - negative history changing events have occurred recently in financial and real estate markets
    - I doubt their "slew of inspectors" ONLY found 5 potential issues

    Is the title of this blog post directed at YOU or the buyers??
  • l.a.guy
    Presumably you're not desperate to sell or this wouldn't even be the topic of discussion.

    If I were the buyer I might be a little put off by your stubbornness (however justified) in the face of such a bad market. (ie. As the buyer I'd want to feel as though I were appreciated by the seller) Also keep in mind, as I'm sure you know, credit continues to tighten and rates are going up. That means your house is effectively getting more expensive to buy, even if your price stays the same.

    Obviously you have to do what is best for you. Personally I wouldn't hesitate to spend a few hundred dollars to facilitate a sale in this market. There is always the possibility that if this sale falls through it will end up costing you more if you have to lower your price in order to offset rising interest rates and/or declining home values.

    I enjoy reading your blog and really wish you the best luck with the sale of your house.
  • Tim & L.A. Guy. Thanks for your comments.

    Oh, crud. You all think I should pay and get it over with, don't you?

    Honestly, if I thought the buyers were legitimately concerned about a roof leak, I would just pay and be done with it. The truth is the inspection report did NOT report that this was even an important fix. They just seem to want the credit.

    They seemed to relent on the other items on the list, but said that the flashing was the most important. All I heard was that a credit would help.

    In addition, if I really thought they would walk, I wouldn’t be so insistent. These buyers came back time and time again with a new bid each time they didn’t get the house. They are emotionally invested. The other buyers that wanted just a deal walked when I counter bid a higher amount.

    Regardless, I'm waiting this one out and seeing what they're saying. Really, they are getting 4 out of 5 fixes attended to.
  • l.a.guy
    Like it or not this is a buyers market. Whether or not it is typically a sellers responsibility is of no consequence. What's important is the potential buyers think it's important, likely because an inspector has told them it is, so it is important.

    Call their "bluff" if you want, but I'd count on losing the sale.

    If it makes you feel any better my wife and I sold a house in December, the buyers brought in 8 inspectors who came up with over a 100 items to fix. A lot were legitimate, some were ridiculous, we did all that we could and gave them a $100K credit.

    You certainly can't fault the buyers for wanting to get the house in the best condition possible. Personally I'd just do the fixes or give them a credit. Don't be stubborn and lose the sale.
  • Tim Hebb
    Just a thought, but if the buyers are looking for a reason to scotch the deal, the flashing could be it.

    Do you want a reason, too? If not, a few hundred bucks is a small price to pay to carry it through to its conclusion.

    Yes, it's annoying. But try to keep your eyes on the larger goal, count to ten and get this deal done. How much more annoying would it be to have to go through all this again?
  • Interesting thought. Thanks, Phyllis.
  • Just a suggestion: you may have less liability by requesting that the buyer accept the present as is condition of the property AND offering a mutually agreed to credit instead of agreeing to any repair.
  • No. But I find it hard to believe that I will. (One could always be wrong.)

    Maybe I'm the only one who believes otherwise. : )
  • Rick
    Do you want to lose the deal over the flashing?
  • Thanks Ross. Yes, I've read that article. And I'm well aware that it's a buyer's market. But I guess I find it hard to believe that they really want to have this flashing done - work that really isn't necessary. There is no damage to the roof nor has there ever been. The flashing would protect the garage more than anything else. It's not a roof over the home.
    Even the inspection report notes that there "may" be some risk. They've already got their loan approved. They've sent their slew of inspectors to come look at the place. The house is in excellent condition. They obviously grew attached to the home.
    Never say never, but I'm not convinced.
    (Amended to say...) Also, if the buyers had been playing straight all along, I would not balk. However, there has been a history of saying one thing and then trying to change the agreement continually along the way. At some point, you have to say enough is enough.
  • Ross
    I've read your blog entry. You are right. If it is not normally the seller's responsibility to install flashing on the roof, you have the moral high ground on this one. However, given the current market conditions, I think you should at least consider doing it anyway. You said that it would cost a few hundred dollars to install the flashing. How much would it cost if the deal falls through? Think carefully about who is calling who's "bluff" here in this decidedly buyer's market. I refer you to a great article posted right here on the redfin blog on July 15, 2008, excerpted from the New York Times, entitled "Sound Advice for Sellers." http://losangeles.redfin.com/b... Don't bite off your nose to spite your face. And good luck on the sale!
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