In my latest post I talked about the due diligence period, during which the buyer (under most circumstances) will have a home inspection done. This tends to cause some anxiety on the part of not only the buyers, but the sellers as well.

• You probably had your own inspection when you bought the home so you will recall what this was like
• And you will also likely remember what issues came up in the inspection. Some may have been taken care of by the seller, or yourself after you moved in. But you will probably have some concern about either the same issues or possibly new ones arising.
• Or perhaps you know of other things that have become issues for YOU through wear and tear, deterioration, or simply aging (a leaky sink, an old roof).
• And what about new issues being discovered that YOUR inspector did not find? The fear of the unknown can cause you some anxiety.

As I have said repeatedly, there will also be some sort of defects or repair issues that arise in a home inspection, so prepare yourself for this. Don't angst over it for too long, but expect there will be problems.

Secondly, the issues may be minor and the buyers may be fine with everything as it stands. You can breathe a sigh of relief.

But often the next hurdle in the sale of your home is the request for repairs:

• Buyers commonly will ask for certain defects to be corrected by the sellers during the transaction
• This may be submitted on an actual form (here in CA the Request for Repairs or RR) or simply in writing, depending on state requirements
• They may request that all the problems be fixed (unrealistic) or just the more serious ones (such as appliances that do not work, electrical plugs that are wired backwards)
• Buyers may ask for a price reduction in lieu of repairs, in an amount they feel is equivalent to the cost of the repairs (this may be based on estimates from professionals - it SHOULD be - or simply a number they are pulling out of a hat)
• You may find some buyers asking you to take care of what YOU consider to be the most minor issues (a small hole in a screen, a cabinet door that does not stay shut). Don't be offended by this, if you can help it, but consider the dynamics of the situation - buyers want your home but have learned it has defects. Like anyone buying a product, they want it to be defect-free. While this is NOT reasonable, it IS often how buyers respond. Think back to YOUR inspection and how you felt when the inspector told you about all the defects and repairs. IN a buyers market it is far more common for buyers to be very picky simply because they can.

As in the offer, Request for Repairs are negotiable, and you have several options:

1. You can agree to the requests by the buyers and fix the problems (best to have this done professionally and to provide documentation, particularly for plumbing, electrical or similar matters where a licensed person should do the work)

2. You can agree to the price reduction or credit back at closing, or YOU can propose this in lieu of taking care of repairs (if you are in the midst of relocation this may be easier for you instead of arranging to have things repaired)

3. You can negotiate WHICH repairs you will fix, OR a different dollar amount than that suggested by the buyers

4. You can decide to fix nothing, or to not provide a credit or a reduction in price

Discussion continues until the parties agree. Some buyers will decide to walk away if they don't get what they want, or in the case of serious flaws. You will need to consider whether some things really ARE problematic and worth fixing in order to sell your home. The goal is to reach a happy medium where both parties are happy about the negotiations.

I thought it might be useful to provide a summary of the home buying process here in California (some of the general activities will be similar in other states, but check with your agent on the specifics). I've talked about most of these issues at one time or another so this is really an overview/summary.

PRE-APPROVAL

• Done BEFORE you start looking so you know your budget
• NOT just pre-qualification - this really has no value to you
• Lender will review income, assets, debt and credit scores to determine how much you can borrow
• Review types of programs, rates, etc.

HOME SEARCH

• Identifying WHAT you want and need
• Searching in your price range on the Internet, attending Open Houses, driving around neighborhoods
• Select your REALTOR
• Tours with your REALTOR (house hunting trips if you are out of state)
• THE DECISION

MAKING AN OFFER

• Offer to Purchase in CA is 10 pages and includes a Buyer Advisory - verbal offer is meaningless
• Accompanied by a deposit ( talk with your agent about amount) - often up to 3%; goes to Escrow once agreement is reached
• Offer present to listing agent; sellers review and respond
• Any counter offers must be in writing; finals signed copies of agreement and counters provided to all parties

CONTINGENCY PERIOD

• Deadline date agreed on by buyer and seller
• Receive, review, approve and sign all disclosures; check on insurability; approve Preliminary Title Report
• Conduct home inspection (and any other desired inspections), request any repairs, if applicable, and resolve with seller
• Apply for loan; appraisal done by licensed appraiser; loan commitment issued
• All contingencies must be removed by due date unless extension agreed on in writing

PREPARING FOR CLOSING

• Make plans to move (obtain estimates); pack
• Set up utilities in new home; arrange to stop utilities in current home
• Provide any final documents to Escrow Company
• Arrange wiring of any funds to escrow
• Set-up and complete final walk-through before closing
• meet with escrow to sign all documents (or if remote, meet with their representative)
• Once everything received and approved by escrow. transfer of property is complete and docs will be recorded
• CONGRATULATIONS ON YOUR NEW HOME - BUY A BOTTLE OF CHAMPAGNE AND CELEBRATE!