[Music]
Hello everyone and Welcome to another
episode of Selling Greenville I am your
host Stan McCune realtor here in Greenville
South Carolina and just a reminder as
always you can always reach me with my
contact information that will be in the
show notes has my email has my direct
phone number if you need me for any
reason and please if you like this show
Please Subscribe rate it review it if
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little rating those things are great and
and I really appreciate those of you
that have done it I'm really excited
about today's topic we're going to be
talking about something that comes up a
lot and honestly I'm going to be
recommending to a lot of my clients in
the future that are kind of new to this
Market or just don't have a lot of
experience with buying and selling homes
in the upstate of South Carolina that
they listen to this podcast so if you're
one of those if you're someone that I've
said to listen to this please do please
hear it out to the very end I'll try to
make it interesting but this is one of
my most important podcasts I believe
because it's dealing with an issue that
comes up a lot with both buyers and
sellers and the issue is is that in
South Carolina generally but
specifically in Greenville we have a
very unique way that we go about the
inspection period and and how we handle
seller paid repairs and it is an an
issue that you know we really want to
see
improved and a lot of us Realtors want
to see Improvement but there's a lot
that don't to be completely honest
there's a lot of politics involved in
this but we're just going to talk about
what is is the
situation my understanding of how this
all works and I have to hedge this with
I can't interpret the contract as a
realtor unfortunately the way real
estate law is only a lawyer can truly
interpret and truly make Law related
decisions based on and and can truly
make
interpretations and judges ultimately
make final law decisions based B on
contract language but I can give you
some on the boots on the ground type
of real estate interpretations that we
as Realtors frequently make and that the
the South Carolina Realtor
Association has also made for us and has
told us as far as guidelines go how to
interpret it all right so here's a
little bit of background in the
situation there is a contract it's
called form 310 that is the kind of the
official South Carolina Realtor
Association contract this is a contract
that's produced by the
Association and it's used very widely
across our state now some parts of South
Carolina it's not as common to use this
in the state of South Carolina you have
to have a written contract for Real
Estate but it can be in any form you can
take a a contract on the back of a
napkin write out the terms and there you
go if everyone signs it that is a real
estate contract as long as it has
everything clearly stated in it as
Realtors we use standard forms and this
is one of the standard forms that are
used in our state now my office which
at the time I'm recording this is sedan
Jordan Realtors which were part of the
Burkshire hathway Home Services Group a
few years ago we produced our own
contract that improved on the South
Carolina contract specifically as it
related to the inspection
procedure well guess what because it
was produced by my office even though
there was no branding from my office on
it even though there was there was
nothing that would directly tie it back
to our office it was called the
simplified contract it's still out there
and it's a major improvement from form
310 offices in our local area that
were insecure about the fact that that
that they didn't produce their own
contract that it was my office that did
it they started not allowing that to
be used now they're not allowed to not
allow certain contracts to be used so
they skirted it in other ways I'm not
going to get into the weeds and all of
that but basically they've said without
saying that they will not accept
offers on any contracts that aren't form
310 so form 310 which is the official
South Carolina Realtor Association form
is more or less the standard form in the
Greenville Market as a as a result of
this and pretty much it's the only form
that I use now if i' if I'm representing
a seller and a form comes in and an
offer comes in on another form of course
it's my obligation as a realtor to
present all offers to my sellers but
this is the form that is almost always
used now
in the past until this form was
Rewritten the past year it had for the
inspection period what we call the
repair
procedure and then what would happen is
because the repair procedure is kind of
limiting and it's not really ideal for
an investor client they had an
additional addendthat you could add
to it that kind of bypassed the repair
procedure and that was called a due
diligence addendand then they had
another addendthat you could add that
was that had a cause to it that you
could check off that was called an Asis
addendit was what we colloquially
called it technically it wasn't an Asis
addendbut it it had a check boox that
basically made it an Asis addendSouth
Carolina this past year this past
calendar year did away with all of that
and they Chang Section 8 of the contract
to have three things repair procedure
due diligence and as is so there are
three different checkboxes in
consecutive order and we have to check
one of them as a realtor for each of
these contract now the contract
specifies if you don't check one of them
what happens and it's really bad if you
don't if you don't check one of them it
defaults to being an Asis transaction so
we'll start with that an Asis
transaction means just what it is that
you are buying the property as is now it
gives you the right to inspect it but
those inspections are meaningless
because you still have to buy the
property as is and if you decide that
you don't want the
property and you are moving forward with
it as is you either didn't check any of
those boxes or you checked off the Asis
box you are obligated to forfeit your
earnest money to back out of that
contract and so as is really the only
reason why you would check that box is
or that you would would make an offer as
a buyer to buy a property as is would be
a if your realtor didn't know what he or
she was doing and forgot to check off
any boxes in that section and so it
defaults to as is which is which is not
good or B if you're if you're buying
a property that you really really
only if it's going to be cash for one
thing because A lender can require
certain repairs to be done done so
really it needs to be a cash purchase
and it needs to be a property honestly
that you are so bullish about and
there's probably multiple offers on it
and to make your offer as sweet as
possible you're saying you know what I'm
willing to Forfeit my earnest money if I
find anything wrong with this I'm not
going to back out without forfeiting my
earnest money and so that is the way
the Asis section works now that does not
negate that there can be other
contingencies in the contract so maybe
you do have financing combined with your
Asis purchase if I'm representing a
seller I would be concerned about that
but let's say that you do have that
and the appraisal comes back low you
have an appraisal contingency in there
well you could back out on the basis of
the low appraisal you can even
combine this is where it gets kind of
weird let's say that you saw the
property and you walked through the
property with your contractor and the
contractor says everything looks good
but I want someone to look in the crawl
space that's that's a licensed you know
cl00 pest inspector to look down there
and make sure there's not major termite
damage you could actually include the
cl00 contingency which gives you the
ability to check for wood destroying
organisms in the craw space that would
include mold that includ includes
termites powder post beetles or
whatever those things are called I'm
obviously no expert in all of that but
there are several wood destroying
organisms you can actually include that
contingency even on an Asis contract is
the way I understand that South Carolina
has has structured this contract form
so that could be a a small little tool
in your toolbox if you have a situation
where you're buying an investment
property the inside looks good and you
just want to look in the crawl space you
want to make your offer as sweet as
possible so you just make it as is and
then just add that contingency for the
for the cl00 just to make sure that
there aren't major active Wood
destroying organisms down there the next
one is the due diligence period by the
way if if you if you check all the boxes
there's a there's a little part of this
that states if all the boxes are checked
then only the top one that you checked
was applied so the order that this
actually goes on the form is repair
procedure then due diligence then Asis
so if you check as is and also check the
due diligence box it will default to
due diligence it will not be a true as
is purchase because the way the contract
is written and the way the language
is the top
one applies regardless of how many boxes
are checked if you check all of them
then repair procedure will apply which
will get to last so that's a little
Nuance of this form they figured that
some Realtors wouldn't know what they
were doing and would either not check
any of them or would check all of them
and so they included some language in
there to to make that very clear to
everyone now the due diligence part of
this contract this is what a lot of
people think that when they buy a house
is really happening but it's not not in
our area
due diligence is basically used in our
area for investment types of properties
properties where you need to check more
than just the major items properties
where maybe you need to have a
structural engineer look at something or
where you need to look at lease
agreements or or check out an
easement or you know do some additional
research Beyond just checking the major
systems in the house you're going to
look at all of those those things and
then you're going to make a
determination if you want to move
forward under the the current terms of
the contract or if you want to try to
renegotiate or just back out
altogether this is a a pretty small
percentage of contracts that are under
the due diligence Arrangement
because it gives so much power back to
the buyer the buyer can basically
terminate the contract and get their
earnest money back for any reason any
reason imaginable they are allowed to do
that during the time
specified and and they can as part of
their due diligence decide to go ahead
and request for some repairs to be done
or they can as part of it request for
the for the price to be reduced so this
is why a lot of investors will will
use this option and and this is a a
commonly used option on the contract for
properties that need a lot of work and
and possibly a lot of inspections will
be
involved the thing to understand about
the due diligence procedure here what
what we'll call it is that a a lot of
sellers are not interested in this if
their home isn't a home that does need a
lot of work if it's just a normal person
selling their house and you know just
moving into another house and their
house doesn't need a lot of work if
they're looking at two contracts and one
of them gives the buyer the right to
back out for any reason and the other
one doesn't and all else are equal guess
what they're going to accept the one
that doesn't give the B the the buyer
so much power so much Liberty to back
out so you have to be careful you know a
lot of buyers are like well let's just
do the thing that gives me the most
Liberty to back out I'm sorry but in
this competitive market you're going to
have a lot of contracts turned down
with that due diligence addendin fact
I just had a client recently that put in
a full price cash offer on a home and
one of the reasons why it was turned
down was because they had a due
diligence period and a competing offer
was willing to just go the route of
being as is and so that's something that
you really you really need to keep in
mind when when considering which
option to move forward with another
consideration with the due diligence
period is you have to get all the
negotiating done with the seller before
the due diligence period ends because if
it ends and all your negotiating has
already been com has has is is still
being worked on let me say it that way
if your due diligence period ends there
it's not the kind of thing where it's
like okay you have until this date and
then you submit your your resolution I
want the seller to do this or I want the
seller to come down this amount of
amount of money and then the seller has
this many days to respond and then the
buyer has this many days to respond no
no no the due diligence period doesn't
work that way it just is a single period
and after that period is over okay here
is what the contract language says it
says should buyer fail to obtain a new
SL amended contract with the seller or
buyer fail to timely slash properly due
diligence terminate this contract during
the due diligence period Then the buyer
agrees to buy and the seller agrees to
sell the property as is so once that due
diligence period is over anything that
hasn't been changed in
writing then that deal goes to ASIS it
is now an Asis purchase beyond anything
that has already been agreed with in
writing so you have to keep that in mind
another thing to keep keep in mind let's
say that you as the buyer want to go the
due diligence route you want to have
that freedom to be able to back out for
any reason but you know that the seller
isn't going to be happy with that or
maybe you're a seller and you get an
offer with a due diligence period built
into it and you're concerned about
giving the buyer that much Liberty there
is
another fee that can be added that is
separate from the earnest money deposit
and and is called a due diligence
termination fee and so a buyer that
includes a due diligence termination fee
what they're saying is if they agree to
terminate the contract if they determine
that they don't want to buy this
property at during their due diligence
period or after their due diligence
period Well no I shouldn't say after
their due diligence period only during
during their due diligence period they
decide that they don't want to move
forward they don't have to Forfeit their
earnest money they can pay the
termination fee so maybe their earnest
money is $5,000 and their termination
fee is
$1,000 during the due diligence period
they back out they only have to pay the
$1,000 they don't have to pay the full
five now after the due diligence period
at that point they decide to back out
now they're on the hook for the $5,000
earnest money
and that's this is an important thing a
lot of sellers with it being a sell's
market they want to see that termination
fee in there if you're buying a property
with a due diligence period they want to
see that you have a little bit of skin
in the game and maybe you can get by
with a $250 or a $500 due diligence
but you need to be confident that you
want that property when you put it under
contract if you're going to include a
termination fee because you're going to
end up paying something if you back out
it's either going to be the termination
fee or or it's going to be your earnest
money almost certainly now if one of
your
contingencies that you have doesn't
work out like I said if you have an
appraisal contingency and you get a low
appraisal you might be able to back out
without surrendering one of those one of
those things but that is highly unusual
highly unusual because most properties
that have this this due diligence
checked off they are not getting an
appraisal done they're not going through
all of that they're purchasing a
property
often times with cash often times
without a whole lot of other
contingencies and all of that work needs
to be done during the due diligence
period to determine if you're going to
move forward or not that is generally
speaking due diligence way of going
about this is really simple because
there's just one date and the buyer just
determines during that time period
whether they want to move forward or not
if they don't there might be a little
bit of a renegotiation to try to to try
to bring both parties back together and
then if not the contract just falls
through and the termination fee is
paid if there is one and if there isn't
one then nothing gets paid by the from
the buyer to the seller so it's really
simple in that regard but again it's
used very sparingly in this sellers
Market really only in in Niche cases
because because it gives so much power
to the buyer and sellers know that they
don't have to give that much power to
the buyer so what is normally used okay
the Asis part of this is used a very
small percentage of the time like
probably 1% or less due diligence I
would say is probably used maybe 10 15%
of the time the vast majority of the
time that real estate contracts in this
area are being written they are being
written with the repair procedure and
the repair procedure is incredibly more
complicated than the other things and so
that's why we have to have this podcast
and this is a conversation that
unfortunately I have to have with pretty
much all of my buyer clients all of my
seller clients because it's so unique
and it's such an unusual way of doing
things and it they attempted to clean
this up in the simplified contract that
my office produced but unfortunately
there are firms that feel threatened by
that and so here we are we're stuck most
of the time with the repair
procedure here's how the repair
procedure Works here's the big
picture you have to have your
inspections done during the inspection
period that that you put in the
contract and after those inspections are
done then you must make a list of
repairs to the
seller the seller is only obligated to
make certain repairs they are not
obligated to to make any and all repairs
that you want they are not obligated to
renegotiate the contract they're not
obligated for anything except for a
very
narrow amount of repairs that the
contract boilerplate language itself
specifies so the seller then either
agrees or disagrees to these repairs if
they agree to the repairs that they have
to do based on the contract line anguage
then the buyer has to move forward or or
the buyer can
can terminate the contract and forfeit
their earnest money and possibly be
litigated that's the that's the other
option not a good option if the
seller does not agree to do the repairs
that are necessary then the buyer has to
make a decision does the buyer attempt
to to get out of the contract at that
point they should be able to get their
earnest money back again it can it
can become a big dispute and this is a
bad time for there to be a big dispute
because you know the courts are
backed up because of covid from my
understanding and it it's it's it's
difficult usually the buyer ends up
winning those earnest money disputes in
the end at least that's that's what I've
heard more often than not is that you
know even if the seller gets the earnest
money the seller kind of gets the short
end of the stick that they you know
while that dispute is still happening
they can't really Market the house as
available so it it it becomes a very
it puts the seller in a in a bit of a
difficult spot in that regard when the
seller doesn't agree to to some of these
repairs or the buyer thinks that some
of these repairs are necessary to be
done then there can be some negotiating
that
happens but in the best case scenario
everyone agrees on the repairs that are
to be done and then the seller does
those
repairs and then the buyer has to check
them and then everyone agrees we are
good to go and then they go to closing
now again this is not factoring in other
contingencies remember there are going
to be tons of other contingencies in a
contract and appraisal contingencies
financing contingencies CL contingencies
which again that's checking for wood
destroying organisms that is actually
separate from the repair procedure
that's its own contingency because we
have such an issue with mold and
termites and whatnot down here so
there are all these other things that
could come into play as well that could
cause a buyer to to be able to back
out but specifically with regard to the
repair procedure it is very limiting in
what the the seller has to
do here is what the actual form what
form 310 says it says that the seller
has to agree to fix these systems to
make these systems operable heating
systems air conditioning systems
electrical systems Plumbing Systems
water supply systems and water Waste
Systems those have to be operable
now someone that I heard with the South
Carolina Realtor
Association who is kind of like the
contract you know one of the contract
language Specialists over there said
that even if let's say for instance that
the AC is cooling the property but not
cooling it to the extent that you would
expect it to technically the seller can
make the argument that it is still an
operative Condition it's cooling it
might not be cooling the way it's
supposed you know it might not be
extremely efficient it might not be
cooling the house as quickly or as well
as you would like it to but that's
operative now if it's not cooling that's
inoperative that needs to be fixed
so that is something to keep in mind
this again it is very vague and it gives
a lot of it it conceives a lot to the
seller the the whole problem here is
that the due diligence option concedes
so much to the buyer and then the Asis
and the repair procedure options concede
a whole lot to to the seller and
and really puts the seller in in the
driver's seat in a lot of things and so
there's not a whole lot here that this
form specifies now there are a few other
things Beyond those major systems that
the seller is obligated to do one is to
make the roof free of leaks now that
doesn't mean replace the roof if there's
a leak the seller might just throw some
mastic or some on the roof and say
okay now it's free of leaks that is a
a possibility I've seen that happen
to address environmental concerns now
what are those this is really Broad
and I wish that this more more specific
but basically the two examples that
were given for environmental concerns by
the South Carolina Realtor
Association that that I heard recently
was mold and
raidon we need to talk about radon in
more detail at some point but we have
a ma we have a major radon problem in
South Carolina thankfully it's easy it's
easily
mitigated but radon is a very
dangerous gas that you never see and
it's naturally occurring in the ground
and that's an environmental concern
that sell
have to address but it doesn't give a
whole lot of specifics on how they
address it or or what environmental
concerns there might be and then the
final thing it says is to make the
Improvement structurally sound and I
cannot stand that language it it's so
confusing but think about it this way if
there is a structural issue with the
house the seller has to make it sound
and it need it needs to be structurally
sound so an example You've Got A
rafter in the roof that is broken that
is something that needs to be made
structurally sound you've got a
foundation issue peers that are
crumbling and the foundation is starting
to fall apart that is a structural issue
that needs to be fixed the seller is
obligated to fix those things now you
have you you go in there and you know I
I have a some clients that are under
contract for house and some of the doors
wouldn't close properly this is a new
construction house some of the doors
won't close proper properly does that
fit in any of those nine buckets that we
discussed AC systems electrical systems
Plumbing Systems water supply Water
waste roof leaks environmental concerns
and structural soundness no that is not
an item in any of those categories
those doors do not need to be closed
they do not need to to be able to to
close correctly let me say it that way
unless they can be connected in some way
to one of those other issues here's one
that a lot of people don't think about
what if the oven doesn't work what if
the range doesn't work what if the
refrigerator doesn't work this doesn't
address
appliances so that's a major problem
I always write in to offers that that
I'm I write on behalf of my buyer
clients that the appliances need to be
an operative condition because that's a
major oversight people expect their
appliances to work when they walk into a
house
now there are some things that you
might think would be included as part of
this that are not and and thankfully
one of the improvements of this contract
over the old one is that it clarifies
some of these things so here are some
things that are not seller paid repairs
now again I should say a buyer can
request for these things to be done but
the seller can simply say no and then
you know it becomes a a game of chicken
and mouse whether the buyer wants to
move forward or whether the buyer did
I just say chicken and mouse cat and
mouse where where we're trying to figure
out whether the buyer wants to move
forward wants to to risk
forfeiting their earnest money etc etc
if you know if we got into a situ
where a buyer really thinks this needs
to be repaired and the seller declines
to do it and the contract clearly is on
the side of the seller but here are the
items the contract specifically says are
not seller paid repairs Home Maintenance
flooring foged
Windows grandfathered code issues
Landscaping preventative maintenance
cosmetic changes Home Improvement and
Energy
Efficiency so you know an example
might be something like this let's
say that there's moisture in the crawl
space the inspector recommends a
French drain installed around the
house well that might be the best way
to avoid moisture going into the crawl
space but that would be a preventative
maintenance category you could you
could say a few different things that
could be a Home Improvement that could
be a preventative maintenance there
there are a few things that a few
buckets that that could could fall under
that are not
included and on that basis if the seller
can find another way of getting moisture
out of the crawl space without doing one
of those things then that's that's the
seller's prerogative and and the seller
can say that they have adequately
addressed the contract language on that
basis let's say that you have
Outlets that are not grounded this is a
very common one you get into these older
homes we have around here the outlets
aren't grounded you have you know an
inspector comes in and he Flags none of
these Outlets are
grounded that is not a seller paid
repaired that's a grandfathered code
issue Outlets were not required to be
grounded 50 years ago or something like
that probably 50 years ago they were
not required to be grounded way back
then it's not necessary
insulation it's a common one too you
know you might you got an old house the
installation up in the attic might be
completely
inadequate it doesn't matter that's a
grandfathered code issue that's not a
repair and so these are things there's a
lot of
confusion okay over what someone can ask
a seller to do and and what they what
the seller is not obligated to do on on
behalf of the buyer
wood rot is is probably the most
controversial of all these things is
wood rot a structural issue or not well
guess
what some of this could depend on what
the inspector says the way the inspector
word something in their inspection
report could at the end of the day make
all the difference in the world in terms
of whether someone whe whether a seller
is obligated to fix a wood rot issue
because it all comes down to whether
it's structural or not right that's the
only category that that could fit in
and so if an inspector says that it's a
structural issue a court would probably
rule on the side of the inspector in
that case but generally speaking wood
rot would be considered more or less a
cosmetic issue and it specifically says
cosmetic changes are not one of the
seller paid repaired items in here
that that a seller is obligated to
do so this what's really unfortunate
about about this what I what I hate
about this is that it oftentimes
requires a whole new round of
negotiating and it's negotiating right
now in this market it's it's pretty
exhausting particularly for the buyer
and then you get to this stage you do
all your inspections and there are some
things that aren't working very well you
know you've got a faucet that is leaking
a little bit you know
technically you could make an argument
that a leaking faucet that's not an
inoperative plumbing issue The Faucet
Works it's just leaking you could make
that argument and the South Carolina
Association of
Realtors would most likely side in that
instance with the seller that the seller
doesn't need to make that repair now I
think that's silly I think a seller
should make that repair I'm going to
encourage all of my seller clients they
have a leaking faucet that's flagged on
the inspection report fix the faucet if
the toilet if if there's something wrong
with the toilet fix the toilet like you
don't want to to alienate the buyer and
and be Petty with the buyer at the end
of the day that doesn't make for a good
transaction but a lot of Sellers and
a lot of buyers right now are Petty and
it creates this exhausting transaction
where every single part along the way
is a negotiation and nobody enjoys that
nobody nobody likes that nobody
benefits from that often times doing
these repairs just cost you know maybe a
few hundred bucks for everything but it
makes the buyer feel so much better at
the end of the day that they don't have
to immediately come in and do all of
these things and so I encourage my
sellers if they're not major major items
just knock them out get them done get
let the buyer you know be content now
if the buyer's asking for some
ridiculous things if they have you know
seven pages of of repairs and the vast
majority of them are are not qualifying
as seller paid repairs and yeah that's a
different story but if they ask for like
you know eight things to be repaired and
three of them technically are not
seller paid repairs but they're also not
that big of a deal I encourage my
sellers most of the time you should just
go ahead and and do that to keep the
transaction humming to keep everyone
happy once you alienate one of the
parties and once you make them feel like
you're being petty they color everything
through that lens and it makes the
transaction go sideways I've seen this
happen so many times people start
reading into each other's motives and
they start reading into all kinds of
different things happening it's not
worth it it's better if everyone just
tries to work together to a reasonable
a reasonable agreement now real quick
to wrap this up that the repair
procedure so there's a deadline by which
the the repair procedure inspections
and requests have to be delivered to the
seller and you know I always ask for
the actual inspection report you know
if I'm if I'm representing the the
seller at least to have the relevant
pages of the inspection report that
apply to the requests that are made now
there's a date that we have to write in
there that by this date we the buyer has
to deliver those requests and then
there's a second field with a second
date that says no later than 6: p.m. on
this date which it we also fill in then
the seller shall deliver notice agreeing
or not agreeing to make the repairs in
the buyer's repair
requests
so that's that's an important important
date you know usually the seller has you
know 3 four five days in order to agree
or to not agree to and it's not an All
or Nothing kind of thing you could agree
to five out of the eight but they
have to agree or not agree to some of
these repairs now this is a really
important part of the language that a
lot of people don't even know is in here
because it's so wordy but it says if the
seller does not timely respond per above
in other words if the seller doesn't
respond by the above date or does not
agree to make all the seller paid
repairs again these are the repairs
outlined in the contract then the buyer
has two calendar days to choose one of
the following one accept the property in
its present condition two negotiate a
new amended contract with the seller for
the payment of those repairs SL price or
three terminate this contract by
delivered notice and then it says this
in all bold and caps if the buyer fails
to accept renegotiate a new amended
contract with the seller a terminate
contract by delivered notice within two
calendar days then the buyer agrees and
the seller agrees to sell the property
as is so wow so this is really important
okay so the buyer has a deadline to
to make their inspections done and to
submit their repair requests to the
seller then the seller has a deadline to
respond agreeing or not agreeing to the
requests if the seller doesn't respond
on time or if the seller doesn't
agree to do repairs that the seller is
obligated to repair for instance to fix
a roof leak or if an outlet is not
working to fix the outlet because that's
an an electrical systems
issue if the seller doesn't respond
on time or doesn't agree to those types
of repairs within two calendar days then
the buyer has the option H has those
three options either to renegotiate or
to terminate or to just move forward but
then if the buyer within two calendar
days doesn't inform the seller of
what he or she intends to do then the
buyer is agreeing to move forward as is
so it these deadlines for the repair
procedure again the due diligence period
has one deadline and it makes it very
simple the the repair procedure has
all these deadlines and of course as a
realtor I keep track of all of that and
make sure that everyone is is following
things the way they're supposed to but
these deadlines can become very
confusing very quickly and they're ex
extremely important to adhere to
unfortunately again as I've said 80 to
90% of our contracts here in the
upstate it's assumed that they are going
to have that repair procedure and just
need to understand it's a messy
procedure that involves negotiation and
a lot of great area me as a realtor I
try to work with other Realtors to
for everyone to be on the same page this
is where this is where a lot of for sale
by owner transactions really hit a major
wall or these transactions where there's
a what we call a fee for service agent
an agent that just posts
posts the listing on the MLS but then
directs all communication directly to
the seller often times there are major
breakdowns at this part in the process I
would say about
90% at least of the time with a for sale
by owner or you know one of these agents
that passes off communication to the
seller there are issues when we're
dealing with the repair procedure
because the seller doesn't fully
understand their obligations they don't
understand some of the colloquialisms
they don't understand the way things
just kind of normally happen in in this
market and it ends up kind of
becoming a mess and it ends up becoming
a headache for a lot of
people and so that's something to
keep in mind as
well hopefully if you're in a
transaction there are two good Realtors
involved that know how to work with each
other that know how to get things done
done that know how to set expectations
for both parties to help them to
compromise and to come to an agreement
so there's not constant
renegotiation renegotiating happening
that's the best case scenario and then
everything can go smoothly and then
there aren't a bunch of of big big
headaches that everyone has to deal with
you know as they go through the
transaction those are the categories
repair procedure due diligence
Asis most people are not going to ever
do an Asis transaction if you're an
investor you might do a few due
diligence ones the vast majority of
you guys are going to be doing
deals with the repair procedure I'll
mention one other thing okay as as part
of this just as a last second tack on
and I'll let you guys
go one of the challenges with this is
that properties that need to be looked
at but let's say that that you're
trying to make your offer attractive to
the
seller but and it's an investment
property but you know the seller is not
going to do any repairs you can't do the
repair procedure because the seller is
not going to do any repairs so you're
limited now to a due diligence or an
Asis period Well the due diligence isn't
a good option because that gives you you
too much power as the buyer and the
seller is going to be frustrated with
that probably or or alarmed by that and
the as is period gives too much power to
the seller now you can't back out
without forfeiting your earnest money
and and of of course we've discussed a
little bit of how you can alleviate some
of the con some of the concerns with
the due diligence period with the
termination fee but at the end of the
day these are imperfect Solutions there
are some some things that can be done
I didn't even discuss all of the all of
the different things that can be done to
try to to improve your offer and for all
the parties to to be happy with how
it's structured but we have some
limitations with form 310 here in South
Carolina by the way I should mention I'm
recording this on August 18th 2020 I'm
sure this this document will be updated
in the future and I'm sure this language
will be updated in the future so make
sure that you double check it with your
realtor or or if I'm your realtor double
check it with me that it hasn't changed
since I I recorded this but those
are the considerations it's a lot to
consider it's a lot of of different
moving
pieces this is my job this is why
even in the age of Zillow there are
still Realtors we still have to act as
that middleman the the person that's on
your side that's that's not paying you
you know $200 an hour as an attorney
but is also able to be on your side
to help you to understand how to work
and navigate through a transaction if
you have any questions let me know my
contact information is in there in the
show notes and until next time don't go
too crazy on the repair procedure don't
be too Petty if you're a buyer or a
seller stay safe let's do some more
deals here in 2020
[Music]