When you’re buying a new home, many factors affect your final decision. Is it in a safe area for your children, one that has good schools? Does it have an extra room that can be turned into a home office? Is there a large backyard for your dog to run around in?
Every home buyer is different, and every home that you look at will be a little bit different as well. Buying a home is an extremely complicated process, and you’ll probably come across a term as some point that you don’t understand right away.
What is a flooring allowance?
A flooring allowance, for instance, is a factor that goes into price negotiation. The seller recognizes that flooring in the home needs to be replaced. Giving the option of a floor allowance says that they’re willing to lower the price slightly to help offset the cost for the buyer to replace the flooring. It’s also often called a carpet allowance, and it’s beneficial to both the seller and the buyer.
The seller benefits because by recognizing the need for new flooring and giving the buyer a lower price, they avoid needing to pay for the repairs themselves or deal with a renovation while they’re still occupying the house. The work can be done in between the previous owner moving out and the new owner moving in.
The buyer benefits by not only getting a slightly lower price on the home but also with brand new flooring that they can choose for themselves. If the previous owner had decided to replace the flooring before putting the house up for sale, the new owner may not have liked the style, color or type of flooring installed.
As part of the negotiation process, a flooring allowance could be brought up from either party.
Can a Buyer Ask for One?
If you’re a home buyer and you really like a particular home, you could request a flooring allowance if you believe the flooring is in poor shape.
The home buyer will likely recognize your concerns about needing to replace the flooring, giving you the opportunity to ask that they lower the price. Depending on how much of the flooring needs to be replaced, whether it’s only a room or the entire house, a flooring allowance can range anywhere between $3,000 to $10,000.
Do not ask for a flooring allowance if your desire to replace the flooring is based only on your tastes. If you simply don’t like the current flooring, it’s not a reasonable justification for asking for a flooring allowance.
Can a Seller Offer One?
When you’re the home seller, it’s completely up to you what the asking price is. You can include a flooring allowance if you want to. Including a flooring allowance can make your home more competitive in the market.
Typically, if you’re willing to negotiate a flooring allowance, you can include that information in the details about the property. Whether you’re selling your home independently or working with an agent, the flooring allowance is one type of negotiation to consider during your selling process.
If you’d like to learn more about flooring allowances or are ready to begin your selling or buying process, contact us at CENTURY 21 Core Partners to speak with an experienced agent.