How to Negotiate Repairs After a Home Inspection

What fixes are mandatory after a home inspection?

There is no such thing as a mandatory repair after a home inspection. The purpose of the inspection is to disclose any issues that could exist with the house to let the buyer understand the condition of the property. If there is a significant issue (like the HVAC needs to be replaced) the inspector will note it as critical for the buyer and seller to review. For the most part, there is nothing stopping the buyer from moving forward with the house as long as they accept these issues. 

Agents Compete, You Win.

There are, however, some repairs that insurers and lenders will request before they approve coverage on the home. For example, historic homes with older electrical wiring can have serious fire hazards. Homes with older roofs are less likely to get insured. Your lenders and insurers want to make sure the home is in good condition before investing in it. 

As a whole, the inspection is meant to protect both the buyer and seller. You can identify any issues before taking ownership of the home, so there aren’t any surprises when you move in. 

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Home Repair Refusal

What happens if the seller refuses to do the repairs?  This happens more frequently in a sellers market but it does happen more often than you might imagine.  Normally repairs will get negotiated back and forth just like anything else in the contract. If you have had tensions rise during negotiations or fought hard on the home price, sellers will sometimes dig in.  As strange as it seems, sometimes sellers get sellers remorse. They may have lived a good portion of their life or watched their kids grow up in the home and then the emotions of leaving once it’s sold overwhelm them.

You may be asking for something unreasonable to repair, a laundry list of repairs or you may be asking for something that the seller has lived with for years. They see no reason why they should fix it now because it wasn’t a big deal to them all this time. In the end, it all comes down to decision time.  If the seller refuses to make any or certain repairs that you feel are important they are telling you they are willing to risk you walking away.  It’s time to get realistic if you want the home & bite the bullet or exercise your option to terminate.  Fortunately most buyers and seller will reach a compromise.

Home Repairs Not Completed?

If negotiated contract repairs are not completed by the closing date then the buyer can extend the closing date up to 15 days or the seller will be in default. Default is not a good thing because if not corrected it normally just makes lawyers richer. The buyer can force specific performance and tie up your property so you can’t sell it to anyone else plus get a damage award.  See my section above concerning why it’s more sensible to have a price adjustment!

Provide Supporting Documents

Provide any supporting documents you may have. The pages of the home inspection report or other reports from another professional you had further investigate a situation, will validate the repair that is being asked for.

A leaking roof the issue and its ramifications are obvious. But take an FPE Stablock Electric Panel, it is known to have a high failure rate. If you are asking for the seller to replace the faulty panel than provide supporting documents showing that the panel has a high rate of failure and replacement is recommended. Google is a wonderful thing!

Negotiating Repairs After a Home Inspection

The home inspector’s job is to give you a report of any issues—both big and small—that are identified in the home. From there, your realtor will work with you to determine what’s reasonable to negotiate over and how to go about the process.

To start, you and your realtor are going to want to choose what fixes are most important to you. You can certainly request minor fixes for things like cracked tiles or broken outlets, but be sure to hone in on what your biggest concerns are before handing over any requests to the seller.

Once you have narrowed down your list of requests, your realtor will present them to the seller’s agent. There are various types of requests you might make in response to a home inspection report, including:

  1. Asking the seller to fix an issue before closing

    This is a common ask, and shifts the responsibility for repairs over to the seller. It’s also usually quite easy to accommodate, at least insofar as the smaller repairs. Keep in mind however that sellers might not be motivated to pay for top quality repairs, so you may be better off going the next route.

  2. Asking for price compensation

    In some cases a buyer may be better off requesting a reduction in the home’s sale price to accommodate for the cost of repairs. For example, $10,000 off the purchase price if a buyer knows they will need to make immediate structural repairs. This is another common way to go, though sellers and buyers often have different ideas about what a fair price reduction is for repairs. Do your research so that you have a good idea of what a certain fix will cost and you can ask for an appropriate amount.

  3. Asking for alternate compensation

    You may choose to barter as a way to negotiate repairs after a home inspection—for example, asking the seller to leave behind some furniture or appliances that they were planning to take to account for the added expense of repairs. If you’re going to barter, make sure to ask for items that represent real value to you, since you’re essentially taking them in lieu of cash.

  4. Asking for a home warranty

    Many buyers choose to ask the seller to purchase a home warranty to cover their first year of residency, especially if the home has outdated appliances that aren’t quite on the fritz but may be soon. Home warranties cover most appliances and systems within a house, including plumbing system, electrical systems, and heating and cooling systems. They don’t cover things like garages, non-plumbing related roof problems, and septic systems. If you think your major needs can be met by a home warranty, then it’s always worth asking the seller to provide one.

Repairs That You Can Fix Yourself and Dont Need to Ask For in Negotiations

A typical home inspection report consists of every small or large part of the house. So, when reviewing the report for repair recommendations, consider that many of the repairs are considered minor and can be completed once you have moved into the house.

Small items like:

  • light fixtures
  • paint or wall paper
  • cabinetry
  • small landscaping, such as flower beds

These small items should never be a deal breaker. Keep in mind that you are negotiating with another family who wants you to move into their home just as much as you do. So, be mindful of what a big repair or small repair should look like.

2. Think ‘big picture’

If you know you want to renovate a bathroom within a few years, then you likely won’t care that a little bit of its floor is damaged, that there’s a leaky faucet, or that the tiles need caulking. These things will get fixed during your future renovation.

However, the repairs are still up for negotiation. Asking the seller for a credit to fix these issues will help offset some of your closing costs.

Author: Laura Mueller

Laura Mueller is a professional writer with nearly five years of experience writing about moving. She is particularly interested in topics around organization, home design, and real estate, and definitely has a few tricks up her sleeve after moving eight times in eight years during her 20s. Laura believes that moving should be as stress-free of an experience as possible, and is always working on new tips and shortcuts that she can share with readers on Moving.com.View all posts by Laura Mueller

Breaking Down The Home Inspection Report Before Renegotiating After The Home Inspection

While reviewing your home inspection report, write down issues that concern you

Classify them into:

  • Issues that present a serious safety issue: no railings on a deck, a rusted main bar on the electric panel, a furnace with a cracked heat exchanger, etc.
  • Issues that present a serious health issue: high levels of radon, mold in the attic, arsenic in the water, etc.
  • Issues that seriously affect the structural integrity of the house: leaking roof, termites in the sill, cracked joists, etc.
  • Issue where systems are not working properly: appliance not working, clogged drain, gutters clogged, etc.
  • Nuisance issues that you are willing to take on yourself: Switching outlets in the kitchen to GFI, fixing a loose railing, replacing a faucet, painting some peeling trim, etc.

Now take that list and put the issues on top of the list that are serious enough to make you walk away from the house if a seller is not willing to repair or provide concession.

Second on your list should be the issues you feel should be rectified but if push comes to shove, you will accept as is should.

Then finally the issues you would be willing to take on yourself.

What Do Home Inspectors Look for?

Home inspectors look at a home's systems, such as heating and AC, interior plumbing, the roof, the foundation, and other structural components of the home. The inspector will look at aspects of the home that are reasonably accessible. Once the inspection is completed, the home inspector will write up a report for you to review.

Check your negotiation approach: Did you make a convincing ask?

Some forms of negotiation are more effective than others. If the sellers froze you out after your inspection requests, take a minute to revisit how you went about making your case. Were your demands backed by the facts? Were you using cost estimations or exact numbers?

A certain amount of tact, reason, persuasion, precision, and expertise can go a long way. According to the same Porch.com study which surveyed homeowners on their home inspection experiences, the most common ways people came up with revised offers were:

  1. I used my real estate agent’s revised offer (37.7%)
  2. The inspector provided estimated repair costs for each item (34.0%)
  3. I got estimates for repair costs from repair companies for each item (33.6%)

These methods outranked strategies like making a “best guess” for repairs or consulting family and friends on the new offer.

Source: (Porch)
Source: (Porch)

Get cost estimates if youre asking for a credit

If you’re asking for a credit from the sellers, one of the most important things you’ll need to do is to come up with an amount for it. Left on your own, it can be hard to pull a fair amount out of thin air, which is why it’s always a good idea to get an estimate from a qualified professional.

In addition, doing this will give your claims more credence in the eyes of the sellers. Put simply, it’s hard to argue against paying a particular amount of money if there’s a professional who’s willing to put in writing that it’s how much the work will cost.

Do sellers have to fix everything on home inspections?

If a buyer presents the seller with a list of items they would like to fix, the seller does not need to accept the repairs. This is where both parties negotiate after a home inspection. The seller can agree to part of the list and see if the buyer accepts it or they can offer other incentives to keep the deal going. 

For example, a seller might offer a price reduction (or a buyer might request one) based on the inspection report. If the roof needs to be replaced and the seller won’t fix it, they can drop the price of the home. This gives the buyer the funds to cover the repair costs. 

Buyers can approach sellers with repair requests or new pricing agreements as part of the negotiation. It’s up to the seller to decide which option they prefer — or if they want to walk away from the sale.

If the buyer and seller can’t agree, the buyer can also walk away from the sale. However, they risk losing the money they put in escrow — or the good faith deposit to show they are serious about the purchase. The seller would then have to turn to back-up offers or re-list the property — which could be seen as a sign that something is wrong with the home.

At the end of the day, both parties want to agree on a fair home price and reasonable conditions for the sale. This is why both buyers and sellers negotiate after a home inspection. Buyers want the property and they want it in the best condition possible. Sellers want to sell quickly and for a fair price. Both parties can find the middle ground through clear negotiations. 

 The bottom line

Negotiating after home inspection for repairs can be a fraught process, however, both parties have an interest in coming to an agreement. Make reasonable requests and be flexible around how concessions are made. If all else fails, you can back out of the deal.

The Home Inspections Purpose Isnt to Intentionally Renegotiate

Working as a Realtor for the past two decades one of my biggest pet peeves is dealing with those buyers who intentionally use a home inspection as an opportunity to renegotiate the transaction.

Don’t get me wrong; there are plenty of times when a buyer is justified in asking a seller to make repairs for unsatisfactory conditions to significant systems like the electrical, plumbing, roof, and foundation.

However, a buyer that expects a home to be delivered like it is new construction is not getting proper guidance from their buyer’s agent. You would not believe how often I get a punch list after a home inspection for some of the most benign things.

Understanding what is a reasonable home inspection request and what is not is essential as a buyer’s agent.

The purpose of a home inspection is to find significant defects that would cause a buyer not to want to move forward with the transaction or, at the very least, have these items repaired.

Trying to Negotiate Problems Your Already Know About is Dumb

Most sellers are smart enough to realize that a hoA Buyer who is under the pretense that a home inspection is to create a long punch list that the seller will remedy sets themselves up for a contentious sale.

Most sellers are smart enough to realize that a home inspection is not the buyer’s opportunity to change the agreed-upon contract term if they have been through this before.

If significant problems are discovered that should be fixed, then that is a different story. That is the real purpose of a home inspection.

When buyers start to overstep their bounds is often when real estate transactions go sour. Buying and selling a home is all about being reasonable. Sometimes buyers will ask for repairs of clearly visible items before an offer has even been made.

When I represent a buyer, I will always advise them not to ask for repairs of items they knew about before writing a contract. If they feel something needs to be addressed monetarily, they should do it in the offer and be upfront about it.

A perfect example would be seeing a crack in a tile or even a seller pointing it out in a disclosure statement and then asking the seller to fix it after a home inspection.

If you want to get someone’s back up, this is the perfect way of doing it. Negotiating repairs after a home inspection should be kept to what is vital.

Negotiating for Repairs or Credits

In most cases, repair credits are a good option for both parties. Sellers are often hesitant to complete repairs because of the hassle and extra time they can add to the sales process. Buyers may also prefer to handle the repairs themselves to ensure the project is done to their standards.

To negotiate for repairs or credits, start by getting an estimate from a local contractor or construction professional for how much the repairs will cost. If you’re working with a real estate agent, they should handle the negotiations on your behalf. Make sure your agent has a copy of the inspection report to use as leverage when working with the listing agent and their seller.

If you’re going solo with your home purchase, you’ll need to work with the listing agent directly to negotiate. Use your contractor’s quote and your home inspection report to guide you.

Conclusion

When negotiating after a home inspection report has been completed, it is imperative to understand that both parties would like a successful transaction. Maintaining a must repairs list of big ticket items that will interfere with the livability and safety of the home are what’s most important.

Do not worry about the small stuff on the repairs list. You can handle those yourself after moving in. Remembering to not nag or annoy the seller with small-ticket items, and will allow for a smooth transaction after the home inspection has been completed. All Coast Home Inspections conduct home inspections in the Houston and Galveston, TX. areas. Reach out to us today!

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