While buying real estate, you will occasionally realize that the initial price you offered to pay isn’t going to be possible for any number of reasons. We will discuss those reasons in greater detail below which will help you determine when it’s right to ask a seller for a price reduction.
Remember, asking for a price reduction isn’t always possible or even the right thing to do in every scenario. Sometimes you just have to bite the bullet and pay what you offered if everything else looks aboveboard.
Getting a Price Reduction
In other instances, the property might not look as appealing as it did prior to further examination of the property. In these cases, it’s definitely possible to get a price reduction as long as you can prove that the deal is no longer good at the initial offer amount.
With that said, let’s look at a few scenarios that could arise that definitely warrant a price reduction on the seller’s part even after the initial offer has been accepted.
Scenario #1: Your Lender Wasn’t Willing to Finance the Offered Amount
In certain situations, a lender may step in during the buying process and bring the entire thing to a screeching halt. They may look over the entire deal, see how much money you’re asking them to lend you, and then tell you that they aren’t willing to lend you the full amount.
Guess what? If this ever happens, you may need to negotiate with the seller and let them know what happened. Tell them that the bank is only willing to lend you X amount of dollars because they don’t feel the property is worth the offered amount and you’ll need them to come down in price in order to purchase the property.
At this stage of the game, the seller has every right to refuse your newly proposed offer. They do not have to accept this deal by any means. But if they are ready to sell and looking to move on with their life, they may be willing to work with you as long as they can afford to do so from a financial standpoint.
Remember, some buyers are desperate to sell. Other buyers are eager to sell because they are retiring are they no longer have their children living with them and they would like to downsize. So you may find a seller willing to work with you and accept a lower offer in certain cases.
Scenario #2: Problems Turned up during the Inspection
Every so often you’ll make an offer to buy a house, your offer will be accepted, and then within 7 to 10 days on average you’ll need to inspect the property. It’s during this inspection process that things could potentially go horribly wrong.
In some cases, the inspection may turn out so bad that you no longer want to buy the property at all. You might discover that there are foundation problems, or maybe the $25,000 septic tank needs to be replaced or any other number of issues that could potentially arise and cost serious cash.
On the other hand, the inspection might reveal that certain major repairs need to take place sooner rather than later. Like you may need to replace the roof within a year or two and that will cost you $10,000 or more. Or you may need to put in a brand-new boiler because the one they have is 20 years old and it should’ve been replaced long ago. Or a wide range of other potential problems might be discovered during the inspection phase.
It’s at this point that you begin renegotiating with the seller. Tell them that your offer was contingent upon a clean inspection report. Now that you’ve discovered all of these additional problems, you’d like to lower your asking price by X amount of dollars.
The seller is under no obligation to accept your new price. They may decide to kill the deal then and there if they feel their property is still worth more money. But, most sellers realize that they need to work with buyers and they are usually willing to negotiate until everyone is satisfied with the new agreement.
Scenario #3: The Appraisal
Finally, you may discover that the house isn’t worth the amount you initially offered based on the results of the appraisal. In many instances, buyers will ask the seller to lower the price accordingly because nobody wants to get ripped off when buying property.
As mentioned a few times, the seller is under no obligation to renegotiate with you or accept your new offer. More often than not, the transaction will come to an end if both parties do not come to a satisfactory agreement.
As you can see, it’s definitely possible to get a buyer to lower their price after your offer has been accepted. But they aren’t going to lower the price unless you have a legitimate and valid reason. So consider asking for a lower price based on the information shared today. If your reasoning falls within this criteria and the seller is reasonable, you should have no trouble renegotiating the price to get it more in your favor.