If I was the listing agent I could never suggest it. If I was a dual agent and representing both sides I could also not propose this kind of solution. This is why I only represent one side during a transaction and never both at the same time.
I was representing a buyer who was in contract to buy a 1950’s ranch house with an older finished basement, complete with red shag carpet and cheap brown paneling starting to peel off the walls. His plan was to gut the basement and refinish it. During the home inspection we actually saw live termites behind the paneling. Here is the fun part of just representing one side and simply trying to get them the best deal possible. The first thing we did was negotiate to have the seller treat the house for termites. Due to the situation we were able to have the seller pay for an extended warranty. Finding termites in the home you are buying is not always a bad thing. This way you can have the seller pay for the problem. If you don’t have termites now doesn’t mean you won’t have them soon so finding them during the inspection allows you to deal with the problem.
To insure there wasn’t any structural damage the seller paid to have the basement gutted. This was a benefit to my client since he was going to have to do that work anyways. So now he is ahead of the game. I love to negotiate when there is nothing to lose so I told the listing agent , “Part of the value of the home was the finished baseent. The price we are paying includes a finished basement and now it isn’t finished. I would like for the seller to compensate my buyer for the lack of a finished basement” The seller ended up paying my buyer another $3,000 as compensation for not having a basement.
We had no downside since my buyer was going to buy it regardless if the seller compensated him or not. If the seller said no we were no worse off. My job as his buyer’s agent is to get him the house at the best deal possible so I thought why not at least try.