CONDO RESERVES
Here is a mistake made by an agent on a listing of mine. It was a condo, and the agent presented an offer with a condo addendum as should have been done. But, its typical that reserves are left with the buyer in this case they are being assigned to the seller. Depending on the amount of the reserves that could be a significant expense for the buyer that they are unaware of. I don’t know the reserves of the condo in this scenario but If they were buying my condo that would be an extra $6000 in cost to the buyer. If the seller wanted to accept this offer, I would explain the situation and ask the seller if we should correct it to the benefit of the buyer in an effort to have a smooth and fair closing.
FHA/VA ADDENDUMS
Watch out for concessions FHA/VA addendums:
Please keep in mind that seller concessions listed in the main purchase agreement are in addition to any other addenda. For example, the main purchase agreement states $5,000 in seller concessions and the FHA addendum states $5,000 in seller concessions. The total would be $10,000 in seller concessions.
Look at FHA/VA addendums advise your client of and watch out for seller concessions, reinspection fees, pest inspection fees and FHA/VA required repairs.
Here is another example that is not so easy to spot:
This image below shows a special segment from the Purchase Agreement on the same deal.
This is the seller contribution segment from the FHA/VA Addendum:
The concessions are intended to be $5000 by buyer and agent, but it’s written as $10,000 in total concessions. So is you list a property, please be careful when reviewing concessions. If its written in more than 1 spot, it counts each time its written unless otherwise written.