Can you negotiate a fair market value on real estate if you were given the first right to buy from the estate?
Can I negotiate a fair market value on real estate? I was given the first right to buy from the estate.
Just because you are given the first right to buy doesn't mean you have to buy or are required to pay their asking price. I would definitely try to negotiate a fair price with the estate. If you can't come to an agreement that makes sense for all parties, walk away.
Real estate is always a complex subject. Do not, I repeat, do not skip the general rules for real estate transactions; that is, get a lawyer and make any and all offers and negotiations subject to written contracts. In many states, real estate negotiations and transactions are not enforceable unless they are in writing. My experience is that both seller and buyer benefit from that process. Maybe especially when family is involved!
Generally, though, there are a few safeguards to help you as a buyer. First, make any contract offer subject to a home inspection. You choose and hire the inspector. The work product from an inspection is a list of things requiring attention. Upon receipt, you can discuss with the seller and ask for them to be repaired, ask for a monetary solution so you can repair them yourself, or choose to ignore the list if you find them insignificant. Importantly, though, you can also choose to walk away if you can’t resolve the issues.
Similarly, your contract offer should also be subject to you finding a mortgage loan to suit your needs. Again, this is important because a mortgage lender will require an appraisal and they won’t make a loan unless the price and terms are “reasonable.” If the mortgage lender balks, you can discuss the appraisal with the seller and ask for a price adjustment. You can also walk away if that price or other named issues can’t be resolved.
Both of these are important because they open the door to negotiations. Even buying from an estate, the seller will need to acknowledge any property shortcomings and any pricing differential raised by the mortgage lender. Of course, they have an option to walk away, too, but it’s going to be hard for them to demand a price that is unreasonable based on conditions or the local real estate market.
Good luck. Don’t ignore what I said about hiring a lawyer. The dollars are just too big to go it alone!