Negotiating After Your Home Inspection

You have gone through the sale process, and finally got the Seller to agree to a price. You have signed an “AS-IS” Contract. The Home inspection is completed, and there are several issues, some are “Nickel & Dime”, while others will set you back more than you bargained for… What do you do? 

Your Rights:

Your rights will depend on the contract you signed, and your negotiating posture with your seller. If the contract you signed is an “AS-IS” contract, and you are in a seller’s market, it is very likely that you will not be able to have much success in negotiating for the seller to take care of any items. Assuming your seller is reasonable, you may be able to negotiate for items that reasonably should be in working order and are not, or at least at the end of their useful life. For instance, let’s assume that you signed an “AS-IS” contract and the inspection reveals that the stove does not heat and the AC does not cool, and nothing was said to you or your agent prior to the inspection. In this situation, your seller can either negotiate to repair these items, give you a credit, or agree to do nothing, leaving you to decide if you really want to buy this property. If you decide to back out of the contract, hopefully you will be able to get your deposit back, but the seller is left with the same issue for the next buyer. Unless this property is a total rehab, the seller should reasonably consider some type of negotiated settlement with you…

Most buyers do home inspections because a professional home inspection should reveal problems with appliances, plumbing, electrical, heating and air conditioning (HVAC), roof, and other essential elements, as well as confirming that the property will pass a “wind-mitigation” inspection for properties in a hurricane area.  When problems arise, before you come to any decisions, there are several things you need to consider. 

Prioritize your demands

After considering and analyzing all of the items in need of repair or replacement, sit down and prioritize the items that are the costliest, and the items that are absolutely in need of immediate attention. If there are safety issues, they will rank higher than items that may be considered to be cosmetic. Leaky pipes, defective wiring, termites, and smoke detectors should rank high on your list, while old carpeting may be able to be overlooked for a while. Remember, sellers generally will be reasonable as long as your requests are reasonable. 

 Discuss with your Realtor

Your Realtor should be able to find out just how motivated the seller is. Discuss with your Realtor your list of priorities, and exactly how much you would be willing to settle for. Remember, if you are getting a loan, your lender may have certain requirements that need to be considered, Also, since you more than likely will also be getting insurance, your insurance agent may have certain requirements that must be considered. There are certain problems that may exist that may make the property uninsurable unless repairs are made, and you need to confirm these before you inspection period expires…

Whether to request repairs or get credits at closing

Assuming you have agreed with the seller on items that will be repaired, you need to agree whether the seller will complete the repairs prior to closing, or offer you credits at closing, and you be responsible for making the repairs after the closing. Make sure you check with your lender, because your lender may have policies governing  (or restricting) repairs. 

Know when enough is too much

You may fall in love with a property, but if the list of repairs is simply more than the seller will agree to pay for, and you are not in a position to repair, you may have to pass on that property and find another.

But by understanding that everything is negotiable (to a point), you will be in better position to find the property that is right for you…

For More Information email us at: Denise@condo.net