Phoenix Real Estate Negotiations That Make You Shake Your Head

Tell me if you can made sense out of any of these scenarios …

Scenario 1

A lender puts a home on the market. At some point thereafter, the lender has a roof inspector check the roof. The inspector tells the lender that the roof is going to need to be replaced because of hail damage. The lender lowers the price by $10,000 without anything on the listing that might indicate there’s a major, five-figure issue looming.

Buyer makes an offer on the listing and, even before escrow opens, receives a copy of the roof report. Buyer is quite stunned to learn a new roof is needed and, reasonably, isn’t as inclined to pay what he thought he would before he knew a new roof was necessary. The bank may have had the roof in mind when it lowered the price, but the buyer didn’t know that when he determined his value for the home and made an offer.

Here’s where I need help … why is it the lender seems stunned to learn that the buyer isn’t as inclined to go forward at the same price knowing a new roof is needed than he was back when he thought the roof was okay?

Scenario 2

An agent has two listings in the same subdivision, seemingly equal quality. The only real difference is one home is bigger than the other, a different model.

The first, larger home sold at $126 per square foot less than two weeks ago.

So, please, please, please explain to me how the agent can say with a straight face the second home is worth $138 per square foot?

Or that this second home was “priced low to sell quickly” when it’s been on the market for nearly seven months?

Scenario 3

Lender accepts a VA offer and then seems surprised to learn that there may be some cosmetic repairs needed for the VA loan to be accepted, since VA frowns upon exposed wiring and missing paint. Lender tries to turn blame on to the buyers agent for writing the offer when logic would dictate the lender and/or listing agent would know better whether the home was VA eligible since, you know, one owns it and the other’s marketing it.

Does a “take it or leave it” attitude make the slightest bit of sense two weeks before the close of escrow date?

Maybe it’s the crazy heat the past two weeks … or maybe these folks are just crazy.

You tell me.

About Jonathan

Jonathan Dalton is a 30-plus-year resident of the Valley and has been helping folks buy and sell homes since 2004. He can be reached at 602-502-9693 or info at allphoenixrealestate.com.

  • In Scenario 1: What is the market price for such properties? Does the asking price reflect the need for a roof compared to other similar properties for sale. If the price reflects the condition and it’s lower then other properties, then why wouldn’t the buyer be expected to pay the asking price?

  • Jonathan Dalton

    In a word, nope.

    And here’s the other side of it … if the home’s listed as Fix-Up, then the buyer is braced for something. But on a home priced around market, learning that a $10K repair is needed is going to be a shock … especially after the buyer, rightly or wrongly (and in this case rightly) already has set his determination of the home’s value to match the sales price.

  • Regarding scenario one: Some people are so stupid! You should ask the lender if they would buy a home at market value when it needs a new roof! All they see is dollar signs and aren’t really thinking about the buyers.