Negotiating Buying/Selling A Home Has Just Changed A Little Bit | Removing The Repair Cap

Have you sold or purchased a home before? Do you remember that there were 2 negotiations (unless if you bought a fixer upper “as is”)? Just when you thought that you had everything moving along you had to come to terms with the other party over what would be repaired based on your inspections before everyone would sit down at the closing table and finalize the transaction. Well, there used to be a repair cap that was agreed to on the front end of negotiations, but that has been removed from the standard Oklahoma real estate contract. Here is an article to expand a little more on all of this.

 

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Oklahoma Association of Realtors column: Negotiating repairs with reliable expectations

By Kacy Bell Oklahoma Association of Realtors

Understanding the rules and regulations of the real estate industry can be like trying to hit the bull’s-eye of a moving target, and working with a Realtor is like hiring an excellent marksman to ensure the process is smooth for buyers and sellers alike.

One example that shows the value of partnering with a professional is the recent removal of the Treatments, Repairs and Replacements (TRR) cap from Oklahoma real estate contracts.

Before Nov. 1, buyers would submit their estimated TRR (treatments, repairs, & replacements) budget as part of the initial offer on a home. When the seller and buyer agreed on the contract, the seller was agreeing to pay up to — but not exceed — that amount for any repairs needed after the inspections. If the necessary repairs exceeded the TRR cap, both parties could renegotiate to agree on new terms or cancel the transaction.

The removal of the TRR cap doesn’t change the steps of the process, but it does change their order. Without the cap, neither party will have set expectations on what repairs are needed before anyone has had time to evaluate the true need. The TRR negotiation will now take place after the inspection instead of upfront, and both parties will still have the ability to cancel the purchase contract if they can’t agree.

The shift in this process also requires a shift in mindset for those who have previously bought and sold homes when the TRR amount was capped.

There is no perfect home. The key for buyers is to anticipate imperfections as they enter into the purchase and be reasonable about the repairs they request. Focus on roof damage, termite damage and electrical, mechanical and plumbing needs.

Your Realtor can help you separate the needs from the nice-to-haves and help you navigate the complexities. Don’t waste resources nitpicking small or purely cosmetic matters when there may be bigger concerns to tackle.

As for sellers, prepare for the worst and hope for the best when it comes to repairs that may need to be made. No one wants to learn that their home needs new piers to support a settling foundation or that they need to invest in a new roof, especially when they’re planning to move out. But once a major issue is uncovered in an inspection, it must then be disclosed in the next transaction.

Before putting your home on the market, you may consider a presale inspection so there are fewer chances for surprises throughout the process. If you encounter a pricey repair in the midst of the process, it is important to consider all your options before declining the repair and canceling the transaction.

Your Realtor can help you determine whether you’ll need to make the repair to sell the home and help you decide the best course of action.

The best rule of thumb for future negotiations is to approach the situation with a level head and a knowledgeable professional at your side.

Kacy Bell is president of the Oklahoma Association of Realtors and a broker associate with Keller Williams Realty Preferred in Tulsa.

Source: Oklahoma Association of Realtors column: Negotiating repairs with reliable expectations | News OK

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