Negotiating Post Inspection Repairs

After an offer has been accepted by the seller the buyer is usually tasked with getting an inspection performed on the home during the agreed to time frame.  Having an inspection performed is an important thing to have done as it provides to the buyer a detailed report of the current condition of the home.  If there are major issues with the home, then repairs might in order or the buyer can opt to move on and find another home.  As based on the current condition the price offered may not be worth it.  Buyers may still like the home but, may want repairs done in order to make sure they get a quality home upon closing.   This article explores how home buyers and sellers can negotiate repairs based on a home inspection report.

Review The Home Inspection Report

Once provided the home buyer should review the home inspection report and ask questions of their real estate agent and home inspector to make sure they fully understand any potential condition issues noted.  Home inspectors are generalists and while they can identify issues with particular areas of the home they will usually recommend further inspection be done by a licensed professional (where licensing is a requirement) specializing in the area of concern.  Sellers sometimes may call into question certain repair requests based on their knowledge of the home.  Having a definitive opinion from a professional server contractor can help settle any debate between the buyer and the seller.

Buyer Agrees to Take Home As-Is

If the issues are not major or the issues are something the buyer can deal with on their own (see below) then the buyer can tell the seller they will proceed under the contract as written and will not be requesting any repairs.  By proceeding with the home purchase and buying it as-is that does not mean the buyer is giving up any rights they may have.  Certainly, for known conditions the buyer understands they are buying the home as is.  If there are conditions that a home inspector and/or buyer are not reasonably able to find, that is there are latent defects, and the seller knows about those defects.  The seller could be held liable if they did not disclose those latent defects to the buyer.  If a buyer suspects latent defect issues in the home being discovered after closing, they should consult with a local real estate attorney to determine what options they may have.

If the seller refuses to make any repairs, then the buyer has to take the home in as-is condition or walk away from the purchase.  Whether the buyer can walk away depends on the terms of the purchase contract.  Depending on the cost of the repairs and whether or not the seller is willing to reduce the price to account for the repairs, the buyer needs to weigh the pros and cons of taking the home as-is.  The buyer could help make that determination better by having professional contractors come and provide estimates on the repairs needed.  If more time is needed to have professionals inspect certain problem areas the buyer and seller will need to agree on extending the inspection period.

Seller Agrees To Make Some or All Repairs

If the seller agrees to make all of the repairs then the buyer should be happy with that outcome unless of course the buyer prefers to have the repairs done by their contractor of choice as noted below.  If the buyer wants to make the repairs then they should state this upfront when sending the repair request to the seller.  Included in that request should be any requests such as reduction in price or closing credit.  The buyer can also ask the seller to have repairs done by contractors chosen by the buyer but the seller could reject that.  These types of negotiations depend on whether it is a buyer’s market or a seller’s market, how long the house has been on the market and a few other factors.

If the seller is only agreeing to do some of the repairs the buyer will have to agree to this change to the repair request.  Buyers should remain reasonable with the repairs requests and items that are not safety related might not be the best requests to ask for, especially when safety related repairs are a bigger concern.  Depending on the terms of the original purchase contract the buyer may or may not be able to use minor repair issues as a reason to cancel the contract.  Major repair issues on the other hand (such as mold, foundation issues, severe plumbing problems and more) can impact the ability of a home to be livable, to obtain insurance and/or to get financing for.

Buyer Agrees to Make Repairs

Depending on the type of repairs needed the buyer may prefer to have the repairs done themselves as they can then control who performs the repairs.  While the buyer can ask the seller to have the repairs performed and include language in the repair request that the repairs be performed by licensed contractors (when required for things like electrical, HVAC, plumbing) or be done by professional contractors (when licensing is not a requirement) that still does not guarantee a good job.  The cheapest contractor may not always be the best contractor, but the seller has an incentive to use the cheapest contractor possible since they are trying to save money as well on a home they are soon to move out of.  

The buyer as part of the inspection request can request a price reduction or request a credit back upon closing so they can handle the repairs with contractors of their own choosing.  If the repairs required are of the nature that need to be done sooner rather than later then the buyer may not have the luxury of waiting to have the repairs done.  Things like leaking plumbing, pest issues (termites), and more if not treated right away can lead to a more expensive headache later.

Other things like the HVAC need to be functional in the extreme cold or extreme hot months and waiting to make those repairs may not make sense either.  In those situations the buyer has to weigh the need for getting the repairs done based on their choices or letting the seller arrange for the repairs.  The buyer should be requesting copies of the repair invoices be shared with them and prior to closing the buyer should walk the home to check the overall condition and verify repairs were properly made.

Final Thoughts

A home inspection is an important thing for a buyer to have performed after they enter into a contract to buy a home.  Once the inspection is done it is up to the buyer and seller to negotiate any needed repairs.  The buyer and sellers have options when it comes to agreeing to who does the repairs and careful attention should be paid when having repairs done.

Additional Resources

• Common Problems Associated With Older Homes - When buying an older home the buyer should keep in mind certain things that need to be looked at closely.  These areas could be a deal breaker and cause issues with obtaining financing and insuring.
• Home Buying Mistakes That Will Cause Pain - Buying a home is usually one of the most expensive purchase in the lives of many.  Doing it wrong and making mistakes will result in loss of money and this article provides some mistakes to avoid like not inspecting, poor negotioations and more.
• How To Get Ready For A Home Inspection - A seller can make the home inspection process go much easier by preparing ahead of time.  Trying to hide things or unintentionally hiding things through clutter will end up backfiring on the seller.

About the author: The above article “Negotiating Post Inspection Repairs” was provided by Paul Sian. Paul can be reached at paul@CinciNKYRealEstate.com or by phone at 513-560-8002. If you’re thinking of selling or buying your investment or commercial business property I would love to share my marketing knowledge and expertise to help you.  Contact me today!

I service the following Greater Cincinnati, OH and Northern KY areas: Alexandria, Amberly, Amelia, Anderson Township, Cincinnati, Batavia, Blue Ash, Covington, Edgewood, Florence, Fort Mitchell, Fort Thomas, Hebron, Hyde Park, Indian Hill, Kenwood, Madeira, Mariemont, Milford, Montgomery, Mt. Washington, Newport, Newtown, Norwood, Taylor Mill, Terrace Park, Union Township, and Villa Hills.