Negotiating After Home Inspection

home inspections

Putting in an offer on a new home and getting it accepted is an exciting moment for any home buyer. But before you get the keys, you are going to have to go through a few other steps in the home buying process, including one of the most important steps, such as the home inspection. This is your chance to walk through the house with a professional and identify any issues with the property that you want the seller to take care of. Most buyers do end up negotiating after a home inspection - try to look at it as a good thing, for it is much better to have the seller handle necessary repairs than be on the line for them once the home is in your name. 
What happens when that inspection reveals a problem? What are your options and how do you move forward/back out if the results are less than ideal?
The answer depends on your sales contract, as well as the repairs that are needed, the seller’s willingness to negotiate, and several other factors. Here is what to do if you find yourself potentially negotiating after a home inspection.

What Is a Home Inspection

A home inspection is a limited non-invasive review on the condition of a home, usually in connection with the sale of the current home. This kind of inspections are often conducted by house inspectors, who have the training and certification performing those inspections.
The inspector prepares and delivers to the client a written report of findings. The client then uses the knowledge gained to make informed decisions about their pending real estate purchase. The home inspector describes the condition of the home at the time of inspection but does not guarantee future condition, efficiency, or life expectancy of systems or components.

Home Inspection Problems

How you negotiate repairs after a home inspection depends on what you find. Your home inspector will be your guide, during the inspection process, and will be able to alert you of anything that may be a cause for negotiations.
Here you can see the most common home inspection problems you may come across during the process:

  • Plumbing issues - Leaking faucets, inadequate water pressure, drainage problems.

  • Mold and mildew - In bathrooms, basements, and anywhere else water might congregate.

  • Improper grading - Water in the basement suggests that the home might be improperly graded, for example, due to erosion or other issues rain and other moisture sources are able to seep into the property’s foundation.

  • Faulty electrical wiring - Broken outlets, open junction boxes, circuit overloads.

  • Roof issues - Missing or deteriorated shingles, missing or deteriorated flashings, issues with the bricks or other materials surrounding the chimney.

  • Foundation issues - Cracks, chips, slopes, other types of concrete degradations.

  • Appliance issues - Improperly functioning kitchen appliances, smoke and/or carbon monoxide detectors, and other home appliances.

  • Heating and cooling inefficiencies - Improper ventilation, improper heat distribution, dirty heating, or boiling systems.

  • Window and door issues - Sticking windows and doors, cracks, draft leaks.

Repairs After Home Inspection

Most houses won’t pass a home inspection without presenting with at least a couple of issues. Most of the time these issues will be relatively minor since otherwise the seller likely would have known about it before putting the home on the market.
It is important to note that not all issues warrant negotiations. When you negotiate repairs after a home inspection your goal is to get any major problems taken care of, particularly things that might have had an impact on your decision to purchase the home or the offer that you made. It is not however an opportunity to make a wish list of requests that the seller has to meet. Remember, you can still back out of the sale at this point, so if the issues are too overwhelming it may be something worth to negotiate after 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.

Home Inspection Report

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:

  • 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.

  • 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.

  • 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.

  • 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 can be soon. Home warranties cover most appliances and systems within a house, including the 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.

Repair or Credit Negotiation 

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. 
Instead of repair or credit negotiation, start by getting an estimate from a local contractor or construction professional for how much the repairs will cost. If you are working with a real estate agent, he or she 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 sellers.