Leaving out all the details, we signed an offer to sell $20k below list, with no inspection, no contingencies. We felt this was a good deal. Now during due diligence, they asked for another $10k off. They said they are worried about the age of the appliances (which was already disclosed) and the siding (nothing wrong with the Hardiplank, painted 3 years ago). This is clearly a premeditated negotiating ploy.
Why do people negotiate in bad faith like this? I just want to tell him to get lost. But it’s only 1.5%. So angry right now.
5761796E65: “Leaving out all the details, we signed an offer to sell $20k below list, with no inspection, no contingencies. We felt this was a good deal. Now during due diligence, they asked for another $10k off. They said they are worried about the age of the appliances (which was already disclosed) and the siding (nothing wrong with the Hardiplank, painted 3 years ago). This is clearly a premeditated negotiating ploy.”
If there were no inspections and no contingencies, then what due diligence is occurring?
What happens if you say no? Either they close or they walk and you keep the Earnest Money? If a different result occurs, then that does not sound like a “No Inspection, No Contingency” contract to me.
The downsides of them walking is that it may take more time for you to receive another offer and/or the next offer may be for a lower price.
The contract gives them 3 days of Due Diligence. The Earnest Money is also due at the same time. So they have not paid the Earnest Money. Our agent says they can cancel (or negotiate) during due diligence with no penalty.
You are right that they didn’t need a Due Diligence period. But it looks like they put it in the contract to give them a window.
It’s not necessarily a premeditated negotiation tactic. It could be just that they started to have second thoughts during the due diligence period - which is the risk in signing a contract that allows one. That said, you can always say no. Before you do that, I would be sure that you look at the specifics of:
What other options the buyers have - are there a lot of listings that are similar to your house, or is yours pretty unique in the current pool of listings?
How the sale price compares to comparable sales and the pricing trend in your area
How flexible you are in selling
When I sold my house in Dallas in 2012, my buyer asked for what I considered to be unreasonable repairs/compensation after doing the inspections - for instance, they asked for the electrical system to be upgraded with arc fault circuits - which had become code after the house was built. They also requested that I either install some insulation that their inspector said that original builder seemed to have missed, or give them the builder’s information so that they could get the builder to replace it. (I was not the original owner, and had no idea who the builder was, and the house was 25 years old.) They also wanted me to replace a retaining wall which their inspector hadn’t mentioned in the report, but they now felt was going to fail soon. (When they sold the house in 2019, the same retaining wall was in place, with no apparent repairs.)
I countered back with what I felt was reasonable compensation for a couple of small issues, and they countered back to me with their original request - so we had reached an impasse. In the mean time, the buyer kept asking me to sign something that their lender was asking for. I refused to do so until we actually came to an agreement, and instead, asked them to release me from the contract so I could put the house back on the market, telling them that unless they agreed to my terms, I wasn’t going to sell the house to them. They caved, and we closed a couple of weeks later.
I did this only after I evaluated the questions that I suggested you evaluate:
Even though it was 2012, there was very little inventory on the market in my area - none in my neighborhood, and only a couple of listings in the nearby neighborhoods. In fact, my next door neighbor’s house, which was about 80 sq ft smaller, and almost an exact match in other amenities to mine, had gone under contract in a bidding war shortly before I put my house on the market. I think that my buyer was the losing bidder.
On a price/sq ft basis, the price we had originally agreed to was almost the same price as my neighbor had agreed to
I didn’t have to sell. I had already closed on the house that I was buying, and I would have been able to carry both mortgages for quite a while if I’d needed to.
5761796E65: "The contract gives them 3 days of Due Diligence. The Earnest Money is also due at the same time. So they have not paid the Earnest Money. Our agent says they can cancel (or negotiate) during due diligence with no penalty.
You are right that they didn’t need a Due Diligence period. But it looks like they put it in the contract to give them a window."
And you signed the contract, too, with that provision in the contract. If there is a due diligence period during which the Buyer can walk at no (or little) cost, IMO it is not really a no contingency contract.
Did your broker discuss what the DD clause meant and might allow?
I also agree with both RHinCT and AJ.
You need to analyze both your and your Buyer’s best alternatives to this deal if you say no to the Buyer’s request and you should not let your emotions drive your decision.
Typically, people looking at homes during this time of year are pretty serious about buying one, because during the time between Thanksgiving and Christmas, there are a lot of other commitments and things to spend time on, rather than looking at houses. With that many showings and the fairly short time before the first offer that came in, I’d probably have made the same decision. I would ask your agent to check in and let the other 21 parties know that it’s back on the market.
Thanks. Our agent already did that. And one of those parties came back with an offer $5k more than the first offer. They had several other houses to look at and were not prepared to make an offer last week. He is asking for Due Diligence, as he is hiring an inspector.