Buyers' agents who make it hard for their clients to get out of bad deals.
After your offer's accepted, you usually have a period of time in which to inspect the property and read all the disclosures, have the home appraised, and get a loan approved. These contingency periods often allow you to walk away from the contract--or renegotiate it--if you discover unexpected problems after the offer is made.
Most agents will help you renegotiate a contract if the inspections turn up serious problems. But many agents are less helpful when dealing with smaller problems.
Many buyers--often at the urging of their agents--agree to buy properties "as-is." There's nothing wrong with this--an "as-is" clause doesn't prevent you as a buyer from conducting your own inspections, and it even allows you to renegotiate or back out of a contract if you uncover a serious, undisclosed problem.
Indeed, adding an as-is clause is often a cost-effective way to strengthen an offer, since the clause makes it more difficult for you to back out over problems that have already been disclosed. It also limits your ability to sue over problems after escrow has closed.
But many agents tell their
clients--and, I think,
sincerely believe--that an "as-is clause" prevents them from
asking for repairs or credits if they discover undisclosed problems.
This isn't true, but this myth conveniently serves to discourage
buyers from putting contracts at risk by asking for credits or
Rigging the purchase contract so that it's harder to back out or renegotiate the price
Buyers' agents usually have lots of good advice about how to strengthen offers. Adding an as-is clause, or beefing up the deposit, or signing off early on disclosures are all ways to make an offer more competitive without increasing the price.
But these giveaways aren't free. Suppose, for example, that you sign a contract and, two weeks later, a similar property comes on the market for $50,000 below what you're offering. Since deposits are usually forfeited if the buyer backs out at the last minute, a big deposit will make it harder for you to get out of your contract or renegotiate it.
Many of the offers I see are, I think, too generous with deposits and other concessions. If you're the only bidder for a property, for example, a large deposit is probably unnecessary.
But while large deposits don't always help buyers, they do help buyers' agents in that they serve to lock buyers more firmly into contracts. Here are other ways agents can rig contracts to lock in buyers:
Recommending less vigilant home and pest inspectors
As a buyer, you want your home and pest inspectors to be as thorough as possible. That way, you have a better chance of uncovering any potentially expensive problems. If you find a serious, yet previously undisclosed problem, you can also use it to reopen negotiations in order to get a better deal.
Agents, though, hate finicky inspectors who spook clients and kill deals, so the ones they recommend might not be the best for you.
|ŠLori Alden, 2010. All rights reserved.|