Being active on the BiggerPockets Forums, I see many different investors with many different strategies. I think most of us have seen those investors with one post who try to justify a clearly illegal or unethical strategy, get railed by members and then disappear. There is also a wide range of active members on the forum from the “squeaky clean” to the “do anything to get a deal as long as it’s technically legal”. I tend to be on the squeaky clean side for multiple reasons. I won’t debate ethics in this article, but I will discuss why I think being squeaky clean is more beneficial than being on the edge.
Should You Ask For a Discount After the Inspection?
The tactic of using the inspection to get a lower price is used by many investors. When you buy a property off the MLS with a standard contract, I believe every state offers an inspection contingency. The inspection contingency allows the buyer to ask for repairs to be made, cancel a contract or make other requests of the seller. If the buyer cancels within the allowed dates, they get their earnest money back from the seller. There are always exceptions and HUD will not give the earnest money back to investors when they cancel due to inspection. Sometimes investors will offer more on a house then they want to pay for it, knowing they will ask for a price reduction after the inspection. Sometimes investors will actually find serious faults in a property after the inspection and have a legitimate reason for the price reduction or requested repairs.
I understand why investors use …read more