6. Negotiate Repairs

Negotiating Repairs

Negotiating repairs can vary greatly in importance depending on the situation. In some cases, they are minor issues, while in others, they can become deal breakers. Several factors contribute to the dynamics of negotiating repairs from a seller’s perspective, with motivation being one of the most significant. Understanding the motivation of both parties and leveraging those motives is a key objective of an experienced negotiator.

Key Factors in Repair Negotiations:

1. Motivation of the Parties:

   • Understanding what drives both the buyer and the seller can provide leverage in negotiations.

   • Sellers who are motivated to close quickly may be more willing to make repairs, while buyers looking for a “perfect” property may push harder for concessions.

2. Condition of the Property:

   • The property’s condition significantly impacts negotiations. For FHA and VA loans, certain repairs are mandatory to meet financing conditions, such as addressing mechanical issues or peeling paint.

3. Role of an Expert Agent:

   • An experienced agent is essential in assessing motivations and ensuring the transaction proceeds smoothly, favoring the seller’s interests.

Arizona 10-Day Inspection Period

In Arizona, the inspection period typically lasts 10 days unless otherwise specified in the contract. This period allows buyers to thoroughly evaluate the property and decide whether to proceed, negotiate repairs, or cancel the contract while retaining their earnest deposit.

Key Steps in the Inspection Process:

1. Buyer Options Before the Inspection Period Ends:

   • Accept the Property: Proceed without requesting any corrections.

   • Cancel the Contract: Provide a valid reason based on the contract terms, resulting in the return of the earnest money.

   • Request Corrections: Submit a list of specific disapproved items for the seller to address.

2. Submit Notice of Disapproved Items:

   • Buyers must notify the seller of any disapproved items before the inspection period ends, using the Arizona Association of Realtors’ (AAR) Buyer’s Inspection Notice and Seller’s Response (BINSR) form.

   • All inspections and investigations should be completed before submitting this notice, and all concerns must be listed in a single submission.

3. Seller Response:

   • The seller has five days to respond to the BINSR. Failure to respond is considered a refusal to address the items.

   • If the seller agrees in writing to make repairs, they must complete them in a workmanlike manner and provide receipts at least three days before the close of escrow (COE).

   • If the seller declines to make repairs, the buyer has five days to cancel the contract after receiving the seller’s response.

Understanding these steps and factors can significantly influence the outcome of repair negotiations, ensuring that the process benefits you as the seller.