How Do Negotiations Work After a Home Inspection?
Many home buyers underestimate the importance of a home inspection. This crucial step in the home buying process could have a major impact on the property’s final sales price. It’s easy to forget that what looks completely fine to the untrained eye could turn out to be serious trouble when inspected by a trusted expert.
If your inspector uncovers problems with the home, you can factor these additional expenses into your negotiations. However, you still want to be reasonable with the seller assuming you still want the home.
Before we explain how to approach these conversations, let’s go over what constitutes a severe issue in need of fixing.
What is a Home Inspection?
During a home inspection, a professional inspector will check the entire house for any problems related to the roof, structure, foundation, and different systems like HVAC, plumbing, electricity, septic etc.
Afterwards, the inspector will provide a report outlining any issues they have found. This can range from small problems that are relatively easy and inexpensive to fix, to significant structural issues requiring costly repairs.
What is a Minor Issue?
The following issues are considered easy fixes.
- Leaky faucets
- Loose fixtures
- Damaged flooring
- Small cracks in the sidewalk or driveway
- Shabby gutters
- Peeling paint
If your inspection uncovers minor repairs, it’s reasonable to ask the seller for a credit so you can address the repairs before closing.
What is a Major Issue?
The following issues are occasionally uncovered during home inspections, and they are considered “major” due to the safety risk and the cost of fixing them:
- Structural damage to the foundation of the house
- Broken or damaged HVAC systems
- Pest infestations
- Roofing damage
- Unsafe electrical work
- Severe plumbing problems, i.e. cast iron piping in need of replacement
- Mold
If a home inspection uncovers major problems, it’s understandable to ask for a price reduction. The cost of these repairs is so great that it’s simply not fair or realistic to ask the seller to cover them or try to repair without much time before closing.
When making a counter-offer, the general rule is to simply be reasonable. If you’re not sure what to counter with, look up the costs of the repairing the issues and subtract that amount from the purchase price of the home. As long as your counter-offer is in this ballpark, it can be considered reasonable.
If the seller refuses to lower the price to a reasonable number, the best option may be to walk away from the sale. This is also an option to consider if the repairs are simply too costly or time-consuming for your liking.
Keep in mind that, if the seller is represented by an experienced Realtor, the price is likely adjusted down from what they see as the market value to cover the cost of repairing the problem.
Keep Paper Records
When negotiating with the seller, it’s very important to bring supporting documents such as the inspection report and official quotes from credible contractors about repairs. Without these documents, the seller could say that a certain repair doesn’t cost as much as you think it does. You have to show the seller that your counter-offer is based on hard data. There is logic behind it.
Likewise, if the seller agrees to perform any repairs themself, be sure to ask for proof in the form of invoices or receipts you may want or need to re-inspect once completed. Otherwise, you wouldn’t know if the repairs were made at all.
If you’re looking for new home and curious about what the process entails, the Kern Team is here to help. We will carefully guide you through each stage of this complex journey, including the inspection. For any questions about home inspections or purchasing a home in South Florida, get in touch with us today.
