Edited 10/01/2013- I was dead wrong yesterday.  


Well, no matter which side of the isle you are on, the government shutdown could affect you.   As far as Real Estate transactions go.... this is a big deal.

President Obama said specifically that "Federal loans for rural communities, small business owners, families buying a home will be frozen,"  


Yesterday, I went into each of the loan products and what the impact would be.  Well, if you aren't already in process, there will be significant delays regardless of the loan product.


Mortgage companies use a system to verify SSN's and another system to verify tax returns/income.  These systems are obviously run by the IRS.  And, these systems are currently shut down.


Until the government is started back up, cash offers should carry even more weight than normal.

Wrong.  This is one of the things that buyers often struggle with, but the seller has no obligation to fix the property or to reduce the price.

The due diligence period, or inspection period, depending on the contract, merely affords you the opportunity to have the home inspected.  There is no obligation on the seller's part to complete repairs or reduce the price in lieu of repairs.

Once the inspection is complete, you can ask that the seller complete repairs.  At that point, it becomes a negotiation.  They may elect to fix everything you ask for, or NOTHING you ask for.

There are many things that affect the seller's decision.

#1) Market-  If the market is a seller's market, (as it is right now in our area), the seller knows that even if you don't complete the purchase, someone else is right behind you bringing another contract.  Now, conversely, two years ago, sellers just wanted to hold the contract together, so they would fix just about anything they could.

#2) Financial ability- Some sellers have no money to pay for repairs, or financial flexibility to reduce the price.

#3) Types of repairs-  Is it a safety issue?  Is it a functional issue?  If so, many times, these get fixed.  But, the reality is that if you are buying an existing home, and not one that is being built, there will be some minor things that the inspector can find.  Even on well maintained homes.  So be reasonable with what you are asking.

#4) Seller's perception of your original offer-  If the contract price is really lower than they wanted to go, and they feel like you are getting a 'steal' to begin with, they will be less likely to complete repairs.

#5) Motivation-  The market plays into this as well.   However, if a seller is being transferred, or has another home under contract, or is getting a divorce, or..... fill in any scenario in which the seller has pressure to get the sale completed, then they will often agree to far more repairs in order to keep the contract and sale moving forward.

#6) Type of loan-  Some loans like FHA, VA, and USDA all have minimum property standards.  If the inspector finds something 'should' come up when the property is appraised by the bank, then the listing agent should advise the seller to go ahead and get it fixed to keep it from being an appraisal/lending condition.

#7) How long has the home been on the market-  This goes into motivation as well.  If the home was on the market for a week, then the seller may just elect to put it back on the market and get a buyer that is less picky.  Heck, maybe one that doesn't even get an inspection.  If the home has been on the market for a year, then they will be motivated to keep the sale moving forward.... of course, unless they just don't have the financial capability.

I have it posted elsewhere, but you should ALWAYS get a home inspection.  When you fall for a home, it is often like the beginning of a romance..... there are flaws that you just don't see.  Love is blind, after all. 

To sum up, keep your requests to the items that would prevent you from buying the home.  Try to picture being on the other side of the transaction and figure out what you would think was 'reasonable'.  

Example- AC is not in working order.  It is reasonable to ask the seller get AC to be in good working condition.  It is not reasonable to expect the seller to replace the AC if they can get the existing unit working properly.

One of the most asked questions I ever get.