Skip to main content

They Asked for What?

 by Michael H. Wasserman

A pervasive problem for some in contemporary society splits us into two camps. One particular segment of the community. They may be your friends, your neighbors, your co-parishioners. They are fully aware of the environment we live in. They read the same things you do. They receive the same guidances we all do. They take wildly different views of what those writings mean. Who they apply to. They are not easily persuaded by reason or the advice of experts. While they acknowledge legal obligations they still want to “do their own thing,” often to the detriment of others they engage with.  

You know who I am talking about. Unrestrained buyers who ask for the sun, the moon and all the stars based on property inspections without regard to the terms of their inspection contingency or as-is contract.

Sellers expect buyers to abide by inspection contingency terms of the contract they (the buyers) offered. If the deal is “as is,” sellers expect not to hear a thing. If there are “asks” they better be significant problems. Our contracts are all pretty clear about what is and is not allowed.

But as one drafter on the 7.0 committee acknowledges “the heart wants what it wants.” If the buyer wants something fixed, it matters not what the contract says. Whether it is a “major material defect” or “safety issue.” That buyers promised they wouldn’t ask for anything. That the seller does not want to be “nickled and dimed.” These buyers are going to ask for whatever they want to ask for.

Some professionals on the other sides of our deals make the problem worse, reimagining “as is” clauses to allow asks for “major material defects and safety issues.” Distorting understanding of the baseline contingency clauses to have no limitations at all. These enablers inject a viral disregard of contract terms into the community. Encouraging buyers to ask for anything they desire and then blindly relaying whatever requests clients direct them to make. They use up all of our resources and expose us all to run-away negotiations. Not only on the deal at hand. Super-spreaders of mis-information encouraging others to behave badly too.

We choose a different course. We – and our broker partners - advise our clients about the contract limitations. We encourage clients to toe the line. Not all will be convinced here. In the end, the buyer decides whether or not a deal makes financial sense. If it does not, we may have no choice but to ask for concessions. Sometimes we really do need to ask for - or to grant otherwise questionable concessions to keep a deal moving forward. But we stand behind the spirit and intent of written contract contingencies and encourage our colleagues to do so too.


Comments

Post a Comment

Popular posts from this blog

PLM Title Shuttered

Title insurance is a critically important part of any real estate transaction; or at least it should be. The title company guaranties the "quality" of an owners interest in the property - that there aren't any (unknown) liens or defects. No buyer that I work for will purchase a property without it. Title insurance is only as good as the insurer. We want to know that the insurance company, like the Rock of Gibraltar , will always be there. We want to sleep easy at night, knowing that the client is protected. That said, it was a bit distressing to see that PLM Title Company shut its doors, without any forewarning last week. Worse still, this morning's news is that there is a criminal investigation underway - and that we do not yet know why. Old timers like me shudder with memories of the great Intercounty Title debacle five years ago. Here's to hoping that this one is nothing like that one. Set aside the problems involved trying to make a claim against a defun...
6 comments
Read more

FHA Loans and Condo Sales - Is Relief on the Way?

By all outward appearances, state government in Illinois has ground to a complete halt, with all eyes focused on the Governor's "problem" and all the related fal - der -rah. Its hardly business as usual in Springfield, but not everything has ground to a halt. Several new bills have been introduced this week. That is not to say that they will be of benefit to we the people. Nonetheless, the cogs and gears are turning, and we are hoping for the best. One such proposal comes from Rep. LaShawn Ford of Chicago's west side, who is himself a real estate broker and entrepreneur . He is the author of House Bill 155 , introduced & referred to the Rules Committee Wednesday. It seeks to address one of the most common problems I am seeing in condominium resale transactions these days; the tension between many Declarations of Condominium and FHA loan guidelines. Many Condo Declarations provide Associations with a "right of first refusal," which basically allows t...
3 comments
Read more

MAYOR DALEY PROPOSES TIF FINANCING FOR SOME DISTRESSED PROPERTIES

Lets see how City Council reacts on this one, but the Mayor introduced a pretty interesting little ordinance that might be a real boon to first time area home buyers willing to buy and rehabilitate some bank-owned properties. Progress Illinois reports that the mayor's bill, introduced on March 9: "seeks to tackle the growing problem of vacant homes that are blighting neighborhoods across Chicago, and in particular in minority communities. Called the Vacant Building TIF Purchase and Rehabilitation Ordinance, the  bill  (PDF) proposes allowing residents with a household income no greater than 100 percent of the regional median income to apply for a tax increment financing (TIF) grant that would pay for up to 25 percent of the cost of purchasing and rehabilitating an empty residential property. Single-family empty homes or units in condo and cooperative buildings with four units or fewer are eligible. The empty homes must be located in a TIF district and must be in need of...
Post a Comment
Read more