Table of Contents
Latest posts by Larry Rothman (see all)
- Co-op Rejection – Is Your Co-op Illiquid? - May 16, 2018
- Questions to Ask Property Management before Buying a Condo or Co-op - May 10, 2018
- Negotiating Issues After A Home Inspection - April 28, 2018
We highly recommend a home inspection. There are various ways you can hire a highly qualified inspector, including through your exclusive buyer’s agent and finding one from the American Society of Home Inspectors. However, once you receive the report, the ball is in your court. There are various actions you can take, and we discuss your options.
If your inspector uncovers major issues, such as faulty wiring, plumbing, HVAC, you have a few choices at your disposal. You have the same options when minor issues crop up, but the expense is a lot lower and presents fewer problems. You can walk away without a penalty since, in New York, you complete an inspection either before making your offer or not long after its acceptance. Either way, you do not have a signed contract, meaning you do not forfeit your deposit. If the needed work is extensive and the seller refuses to pony up enough funds to satisfy you, this might be your best option.
The second option is to allow the seller to either make the repairs or take money off the purchase price. Many people opt for this, and it is a good option, with a couple of caveats. First, make sure that there are no other problems that haven’t been uncovered. Second, you need to have a good estimate. Otherwise, you are not negotiating with the full amount of information. You may wish to bring in a contractor to make sure you receive satisfactory answers to these questions.
The third option is to eat the entire repair cost yourself. If you bought the property for an attractive price, you might decide it is worth it to pay the extra expense. Perhaps the seller knew there were problems and factored it into the price, particularly if it is an “as is” sale.
Lastly, you could agree to some combination of the second and third options. The seller may agree to take some money off the price, and you are responsible for the balance of the repair cost. As with the other options, the negotiation is conducted through your exclusive buyer’s agent and the seller’s agent.
Condos and co-ops present unique circumstances. Dealing with a condo inspection is the more straightforward situation. Remember, you own the space inside the condo walls, and are responsible for this area. Therefore, if your home inspection brings up anything inside the unit, you negotiate with the sellers.
Co-ops are more confusing. You own shares in a corporation and live in one of the units. You pay monthly maintenance fees, which covers repairs for your unit and common areas. However, this does not mean you are in the clear and do not have to worry about an inspection. Major repairs to the common areas, such as the lobby, elevator, or roof, either get paid from the reserve fund or a special assessment. You want to have those areas inspected. You should also have the same inspection done inside the apartment as you would if it were a private home or condo. However, you may have to negotiate with the board over the repair cost.
We also advise getting an inspection of a newly constructed building. Just because it is recently built does not mean there are no problems. Shoddy materials or poor installation could still present issues. In this case, you negotiate with the developers if issues arise, or you can simply walk away