Expert: Connie Wildasinn-Broker,GRI,Realtor® - 10/1/2009

Question
Our home, a beautiful old house on 4 acres of land that lies adjacent to a large creek in the country, has been on the market a little over a year. A home inspection by a prospective buyer this year revealed major problems we didn't know about, including septic, electrical, foundation, possibly plumbing and water. We have paid to have the house rewired. Another buyer has now offered us $20,000 below asking price, which we had already reduced substantially because we knew we'd probably discover "bad" things in a house this old, over 100 years. Buyer also wants us to pay to hook up a never used well (we used a spring) and have money put in escrow (all from the sale of the house) to cover the rest of the repairs. Do we have any bargaining leverage at this point? What kind of offer would be a reasonable one for us to make? Is there any incentive we could offer besides just the escrow for repairs? We would really like to sell to this buyer, especially since the capital gain tax rate goes up next year, but we don't want to sell ourselves short, especially since we would like to use the proceeds to bolster our retirement account. I would just like several points of view on this and would very much appreciate your take on it.

Answer
Hi J,

Welcome to home sale 101 in the year 2009! No kidding aside, in todays market place, it is very hard to have a wonderful home sale experience.  Buyers are very demanding today, and sellers don't have the equity they had just 3 years ago.  The negotiations on repair are always a tricky part to deal with, no home, and certainly a home of 100years will be repair free... and buyers typically want upgrades that are not necessary as not home is to code, even the day after build, as codes change all the time and are upgraded and dismantaled... I would hope you have a strong agent you are working with, that has good negotiation skills and can get you through all of this... Keep in mind your bottom line and know when to fold.

You have been on the market for over a year! that is a long long long time... All homes sell if the price is right, so you most likely were over priced to start and by way of the time frame alone you have lost money... If you now loose your capitol gains status, you will have to pay long - term cap gains, and that will eat away and even more of your money...

My advise, do what you need to do to keep these buyers, and get the deal closed... if we continue to down trend you will most certainly loose even more money in the long run.

Your bargaining leverage is only what you have to loose and how much that buyer wants your home... you always have the option to do nothing, do some, do all, give money... or cancel the transaction (although this is usually up to the buyer if the seller is not responsive) your lack of response is an acceptable response per the contract,(not the best negotiating tool)

Bottom line, get the house sold... and good luck!