If you’re buying a home, you probably know that it’s not uncommon to negotiate for credits at closing depending on a wide range of issues. But as a buyer, there are some things you should know before you begin this negotiation process. Here are some tips for buyers seeking closing credits:
- Closing credits are commonly negotiated as a result of home inspection issues. Sellers don’t always know about problems in their home until an inspection turns up something amiss. If you’re buying a home and want to make sure you’re covered, do not waive your right to inspect the home! Additionally, consider specialized inspections for pools, septic systems, or specialized add-ons which regular inspections don’t necessarily cover.
- Beware the seller who offers a pre-inspection report. Sometimes sellers will have an inspection before they list the home. This means they’re generally well-armed when it comes to closing credits, and they may be telling you they’re particularly firm about their pricing.
- Don’t assume sellers will always offer you cash consideration at closing. Sellers may not offer you a discount— they might prefer to have the work done. If this is the case, you’re not going to get a reduced price. Instead, you’re going to be buying the house pending satisfactory completion of the repair. Asking for credits for work you weren’t planning to have done can be a risky gambit.
- Know the market before you press on credits. In a highly competitive market where sellers are in the driver’s seat, don’t be surprised if a seller decides to ditch your agreement and seek another buyer. You have much more leverage in a buyer’s market, so keep this in mind.
- Sellers often build in cushioning for credits, so don’t hesitate to ask if there’s a reasonable request to be made. Again, this goes back to the type of market you’re in, but almost every seller is prepared to hear about concessions which may need to be made in order to seal the deal.
Negotiations prior to closing are common, so don’t fear them. Simply be smart about how you proceed and you’re get through the big day just fine.
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