One of the most vital phases of buying a house is having it inspected. Home inspections over the last few years were few and far between. The crazy hot seller's market forced many home buyers into forgoing their inspection.
With bidding wars being the norm and not the exception, many buyers were waiving their inspection to strengthen their offer.
Things are starting to change in many real estate markets around the country. Instead of markets dramatically favoring sellers, they are becoming more balanced.
It has led to home inspections coming back in vogue again. Buyers also have the chance to negotiate after a home inspection. Over the last couple of years, negotiating after a home inspection was not even an option.
With negotiations back in the home buying process, buyers need to know what is reasonable and what isn't.
Let's look at what you need to know about home inspection negotiations.
The home inspection contingency in a real estate contract allows the buyer to back out of the sale when there are issues. The buyer can have their earnest money deposit returned when this happens.
Most of the time, the problems are not significant enough for a buyer to terminate but to either negotiate the price or ask the seller to complete repairs.
The home inspector will provide the buyer with a detailed home inspection report flagging all of the issues found with the property.
When a buyer wants to continue with the transaction, they will ask the seller for some concessions.
It's the point in time where understanding how to negotiate after a home inspection becomes crucial.
Here are the steps you need to take:
One of the better home inspection tips is to ensure that the inspector will provide pictures with their report. If not, it will be essential you attend the inspection.
There will be numerous things covered at the inspection, so it is worthwhile to be in attendance.
Once the report from your home inspector has been obtained, send a copy to your real estate agent.
Your agent should be knowledgeable and experienced in this matter, and a competent agent should be able to advise you on the necessary repairs or concessions that ought to be requested.
Most buyer's agents will have communicated with the seller's agent and have expectations of what the seller will consider.
When negotiating after a home inspection, the most essential things to be fixed usually concern health and safety. Homes should be safe to live in and not have significant problems that a buyer should take on.
There are usually going to be many minor maintenance issues. For the most part, these items should be overlooked. You should never consider a home inspection a chance to renegotiate purposefully.
Instead, focus on what you consider to be deal breakers. These problems are typically expensive to fix.
Just because you're not going to ask the seller not to fix something doesn't mean you shouldn't address it yourself.
Keep the minor items off of your requests to the seller but don't forget about doing the repairs, as they could grow into more significant problems.
Part of negotiating after a home inspection is knowing what is reasonable to ask for as a concession. You can't do that without knowing the cost of remedying these issues.
Speaking to some professional contractors will become essential. The home inspector cannot quote repair work as it is a conflict of interest.
With the estimated cost of repairs in hand, you'll be armed to start the negotiation process. Having the estimates will help justify what you'll be asking for as a concession.
It is usually best to ask the seller to adjust the price or give you a credit at closing. Those in the real estate industry refer to it as a seller concession.
When you ask the seller to make repairs, they will need to meet your satisfaction, which does not always happen.
You're usually better off taking the money and getting it done with a contractor you prefer to work with. The seller is also not obligated to do things a certain way.
In real estate transactions where time is of the essence, it works much better to address problems monetarily.
Negotiating after a home inspection should not be a win-at-all-costs endeavor. The best negotiation process will be when both parties are satisfied with the outcome.
When you receive the home inspection report, don't expect to hand it to the seller and tell them to fix everything.
You're likely to be met with extreme resistance and put the negotiations in a downward spiral right off the bat.
Get what's really important taken care of and move on. This will be the best course of action if you love the house.
Sometimes no matter how hard you try to won't see eye to eye with the other party. Either buyers or sellers have been known to be thick-headed.
Sellers need to understand that issues found at a home inspection will need to be disclosed to future buyers. If every buyer wants a particular repair completed or compensated for, then you do it! That's just common sense.
Buyers also shouldn't walk away from a great property just because some blemishes were discovered.
What some buyers need to remember is the home inspector can make mistakes. A home inspector is human, just like us. There have been times over my thirty-six-year career when a home inspector has been wrong.
Backing out of a purchase because of a home inspector's error could be heartbreaking later on when someone else buys the home you adore.
Inspection negotiations are different on every property. The bottom line for buyers and sellers is to be reasonable. A mutually satisfactory agreement can be worked out when the parties do this.
Once the home inspection negotiation is completed, you can get your mortgage. Best of luck with your purchase!