Is requesting a seller credit early in DD frowned upon?
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[{"id": "h8xtlw5", "text": "If you do not perform per contract you lose your deposit. If there is hardship you can not move on, caused by loss in income, Covid infected family with doctor's proof you might get a refund.  It is OK to reenter the business deal later but your reputation is at stake.\n\nOne thing buyers often do that kills their chance of completing is haggle for a price reduction after getting into a contract.   In all cases, the seller wants nothing to do with the buyer and go with someone who will deliver promises.", "replies": [{"id": "h8y26k4", "text": "Not all deposits are non-refundable\u2026", "replies": [{"id": "h8y2s4f", "text": "It is up to the seller in trust account.", "replies": [{"id": "h8y348p", "text": "In the US it depends on the contract but most commercial contracts allow you to have your deposit refunded for any reason whatsoever during DD. This is very standard language.", "replies": [{"id": "h8yd0bb", "text": "Yeah as long as they\u2019re in the DD period and haven\u2019t gone hard they can likely get the deposit back (completely dependent on their situation but most LOI\u2019s work that way). \n\nThere are people in the industry who frown on those who re-trade after executing an LOI but I don\u2019t see the problem. More important than your reputation for potentially re-trading due to (actually legitimate) issues that come up in DD is your reputation for closing. You don\u2019t want to have a reputation for walking or failing to secure capital.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "h8xwlyi", "text": "I would complete all of your inspections so that when you ask for the credit, you are only asking 1 time and not continually coming back to the table with additional asks. The seller may appreciate the ask sooner in the process than having you wait til the last minute....in a sense, dragging out the deal.", "replies": [], "depth": 1}, {"id": "h8xxqq7", "text": "I assume you are in your study period.  You can do anything during your due diligence, this includes bringing to attention issues the Seller may have hidden (deferred maintenance) and adjust the sales price.  The study period is your time confirm what you are acquiring.", "replies": [], "depth": 1}, {"id": "h8y21xs", "text": "How serious of issue are we talking and cost to remediate? This is called a re-trade which obviously Sellers and brokers do not love, but if this is a real issue that was only discovered during DD, it\u2019s very logical to ask. Will they budge on price, who knows? \n\nDo you have a refundable deposit that goes hard at expiration of DD? Or did you go hard at PSA? If hard at expiration of DD, if the Seller is not being reasonable in your mind and adjusting price, you have every right to walk. That is the entire point of DD. Terminating the contract and then coming back does not make sense, ask for any adjustments now while you have control.", "replies": [{"id": "h8y31r9", "text": "Agree. This is all part of the due diligence of the property. Assuming you haven\u2019t gone non-refundable, continue with your due diligence. Make the requests all at once with the backup. For example, if there is a roof issue, have the roof report along with the estimated cost to fix. Do not terminate the contract and come back to the table. You\u2019re at the table now. If he won\u2019t accept the credits (assuming they are reasonable), be ready to walk.", "replies": [], "depth": 2}, {"id": "h8za0g2", "text": "My $ is 100% refundable for 45 days, as long as I give them notice that it failed physical inspection.", "replies": [], "depth": 2}], "depth": 1}, {"id": "h8y7hmf", "text": "What due diligence do you have left to do?  Typically when you make a request to renegotiate a deal like that the seller will ask you to waive/terminate your due diligence period if they accept, so you can not come back for more.  Depending on whats going on in the deal it may be a partial waiver.  So for example, if its contingent on getting a zoning approval and you want money off because you figured out there is a construction issue it would make sense to negotiate that prior to filing for zoning etc but if the seller is smart they will not let you exit the contract after this because you decided the roof is bad after they gave you some money for the foundation etc.\n\nIn these situations its semi typical to just to have a normal people conversation and say what you discovered, ask if they know anything about, have ever gotten quotes, etc.  You may get some clues on how to proceed from those convos.  Some sellers really don't respond to this at all and just say to send over whatever it is you want as an addendum and they will respond in writing.\n\nYou don't usually terminate contracts and renegotiate. You typically just ask for whatever it is you want in return for waiving inspections and if they say no or don't respond you send a contract termination and the deal is basically done.", "replies": [], "depth": 1}, {"id": "h8ymyov", "text": "You can *ask* for anything.", "replies": [], "depth": 1}, {"id": "h8zl0wl", "text": "What\u2019s the issue? People ask for things all the time, doesn\u2019t mean you\u2019ll get it but doesn\u2019t hurt to ask.", "replies": [], "depth": 1}, {"id": "h8zobtk", "text": "I have a different point than answering your question.  How are you going to improve your cap by \u201cmanagement automations?\u201d  I assume you mean you\u2019re going to reduce expenses, thereby driving up your NOI and your cap rate?", "replies": [], "depth": 1}]