Can You Renegotiate
After an Agreement?

Question: We have a contract on a house in Denver. We now feel that the price we agreed on per the contract is too much. Can we still renegotiate? Our inspection is scheduled for within the week, so can we say we dislike something the inspector might find and use this as an out? Could we then try to come back with an offer that would be approximately $20,000 less?

We are nervous that the market in Denver will drop and the house will depreciate in value.Any predictions?

-- Carey, Chicago

Carey:When you signed the purchase agreement, your agent should have told you that it is intended to be a legally binding document. That means that you are committed to buying the house for the price agreed upon.

Having said that, however, you are correct when you ask about renegotiation. In real estate, everything is negotiable at all times. It just depends on how good a negotiator you are and what you are willing to risk. If a serious defect is discovered during the home inspection, you should be able to gracefully back out of the deal and get your deposit returned. However, if no serious defect is found the seller could demand that you move forward or hold on to your deposit. It all depends on the wording of the home- inspection contingency in your purchase contract. You will have to check with an attorney on this.

When the market’s falling, some risk-taking buyers will simply refuse to complete the purchase until the seller agrees to a price reduction. They use the excuse of refusing to accept the home inspection or the seller’s disclosures. Many sellers, realizing that buyers are hard to come by, will go along rather than lose the sale. However, an adamant seller could call your “bluff” and demand that you complete the sale as agreed or will take you to court where you might win or lose. Are you willing to risk this?

As to market conditions, for the last several years Denver has had one of the hottest residential real-estate markets in the country. It proves only natural that eventually it would run out of steam and super-high prices would drop back to more realistic levels. Of course the real question is, does this foreshadow another real- estate recession? I don’t have a crystal ball, but I suspect that if the country doesn’t fall into a deeper form of recession and a recovery starts by next year, the real- estate market will be just fine. If the economy nosedives, however, real estate will not be exempt.

• To submit your real-estate question to Mr. Irwin, click here. He will try to respond to as many readers as possible, but due to volume of mail received, a response is not guaranteed.

-- Mr. Irwin has more than 25 years' experience as a Los Angeles-area real-estate broker. He is the author of more than two dozen books about real estate and is recognized as one of the most knowledgeable writers in the real-estate field. Mr. Irwin's most recent book is "Tips and Traps When Building Your Own Home," (McGraw-Hill, 2000).

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