Carpet Allowance - Landlord Forum thread 341156

Carpet Allowance by Anonymous on November 27, 2015 @17:08

I am a landlord but I am in the process of selling my home. A potential buyer is asking for an carpet allowance. The carpet is 2 years old but apparently they would like something different, (buyer's discretion). What is a carpet allowance and will it deduct from my asking price?? I'm willing to negotiate anything but I told my agent let's see if they actually put something in writing. My tenant was in the home for 11 years and then decided to move out. I had a couple 2 weeks ago who asked if I would replace the kitchen floor and put in a microwave over the stove, I happened to be there when they agent brought them in. I did both of those things ($985) and no offer. I got the word back to the couple we could work that out but if there's no offer I'm not going to do anything. Of course I want to sell the home asap. :)

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Re: Carpet Allowance by babbles (Georiga) on November 27, 2015 @17:12	[ Reply ]

Lets just say I'm asking for 150k and this allowance is 5k and my appraisal comes back @140k, then what? They will want 5k off the 140k appraisal? That's 135k!

Re: Carpet Allowance by Garry (Iowa) on November 27, 2015 @22:36	[ Reply ]

Ok, so as of today, you have 2 year old carpet through out the home, as well as a knew kitchen floor and a new micro wave. You and your agent need to go through the home together, and decide if anything else needs up dating. Appliances and painting are 2 of the big things that people look for. New faucets, knobs and handles on cupboard doors, and "maybe" some new lighting, will also attract buyers, but are fairly inexpensive to put on/in. Beyond that, do not do anything major until you have a definite offer in front of you. Remember, if you do some of these suggestions, and you still can't sell the home, you may have to go back to renting it out again, and those are items that prospective tenants look for, also. That means you will attract a higher quality of tenant at a higher rent, too. EVERYTHING is negotionable when you are trying to sell a home. But with these things already done, if someone wants to put in something different, just negotiate on price only, and let the buyers change whatever they like, once you and they have closed on the home.

Re: Carpet Allowance by Int'l LL (CA) on November 27, 2015 @22:59	[ Reply ]

I agree with G. Given that the carpet is two years old, it shouldn't be necessary to negotiate a carpet allowance. Wait and see what other real offers you receive before agreeing to any repair credit/allowance

Re: Carpet Allowance

Re: Carpet Allowance by MrDan (Georgia) on November 29, 2015 @14:41	[ Reply ]

"What is a carpet allowance and will it deduct from my asking price??" One problem is that, the buyers lender will not normally allow a credit allowance directly from the seller to the buyer at closing and will reduce the sales price by the amount of the repair credit allowance and then calculate the loan to value on that reduced sales price. So, if you are giving the buyer a $5000 carpeting allowance at closing. The lender will reduce the sales price by that allowance and calculate the loan to value off of the reduce sales price. If the buyer is putting down a small down payment, they will have to increase it because of the carpet allowance credit. If the buyer is asking for a 'credit allowance', it might be a sign that they do not have all the necessary funds to purchase the home. There are work arounds' on how this can be done, but it would need the approval of the buyers lender. Two year old carpet does not necessary mean it's still appropriate, as the type and color of the carpet could be a problem in selling. If that's the case, replacing the carpet yourself instead of a credit allowance is a better route to go. A carpet allowance does not bring that ‘New Home Smell’ into your home but new carpeting will, it makes the house feel newer and smell clean. Remember, buyers will expect a much higher allowance than the actual cost of replacement. With careful shopping you may be able to have carpet installed for $3000 while a Buyer will ask for $5000 in an allowance. Buyers will shop the high end market because, after all, they are spending your money.

Re: Carpet Allowance