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is it better for a buyer to receive a credit or a price reduction after home inspection

  • September 02 2014 - Toms River
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Answers (11)

In my opinion, a credit is actual money to offset your closing costs and can therefore be used to fix whatever things need to be repaired.  If you have ample funds to take care of repairs, then ask for a price reduction.  When you ask for a credit, make sure escrow words the Escrow Amendment in such a way that does not mention what the credit is for (it is NOT required to state what the credit is for).  Good luck to you.
  • September 17 2014
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 If you are worried about the home 's appraisal number then the lower price will help.
  • September 17 2014
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Depends on the lender.  Some won't allow on the closing Hud . You need to speak with your lender regarding this.  As far as what is better it really "depends" on situation 
  • September 16 2014
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And then there is the option of having money held in escrow for a required repair after escrow closes, to be paid to the contractor selected by the new owner.

And as everyone else says, the specifics matter.  It is not "one size fits all".
  • September 02 2014
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Hamp is right... some lenders won't allow "repair credits" only credit for closing costs and even then they limit the amount.
  • September 02 2014
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Just FYI. Credits freak some Lenders out. Price reductions don't.
  • September 02 2014
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Since you didn't say why you want either, didn't mention a repair/replacement form the seller. Plus is this a small dollar item, or a major one? That limits your range of advise , I can only add to "it depends" with:

Try  asking your agent for two net sheets , one for the credit, one as a price reduction and see how the numbers run.

 
  • September 02 2014
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I agree with Jordana. As with most questions about real estate, the answer is, "It depends".

Len
  • September 02 2014
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It really depends on buyers need/want.  When I had a client paying cash,  we lowered the price (less money to close). With a loan,  if you get a credit its that much less money to bring to closing.  If you lower the price,  you still need to bring about as much to the closing, the payment will lower minimally (depending on the loan and reduction).  Would you prefer a smaller loan? or less cash to closing?
  • September 02 2014
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Hi Jimcorbett1, In most cases the buyer will ask for a credit.  If the cost of the repairs are unusually high they may ask for a price reduction.  Hope that helps.
  • September 02 2014
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A credit will offset funds needed at closing, a price decrease could lower some funds required, but not as much as a credit will offset them.
  • September 02 2014
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