You should understand that no home is perfect, and an honest inspector most likely will find some issues with your home but this is normal. The way you handle the negotiations that follow, though, can make a big difference on how much you give on your end and the level of stress you experience from the process.
This is one of the reasons that I like to council all of my clients on how to prepare their home for the home inspection. Taking care of the issues you know about will go a long way in making sure your transaction goes smoothly to the finish line.
Working as a Realtor for the past two decades I learned how to deal with those buyers who intentionally use a home inspection as an opportunity to re-negotiate the transaction. Also plenty of times a buyer is justified in asking a seller to make repairs to major systems like the electrical, plumbing, roof and foundation.
When a buyer expects the home to be delivered like it is new construction is not getting good guidance from their agent. Many times they will send a list with the many cosmetic items to be repaired. The purpose of a home inspection is to find major defects that would cause a buyer not to want to move forward with the transaction or at the very least have these items repaired.
When buyers start to over step their bounds is often times when real estate transactions go sour. Buying and selling a home is all about being reasonable. Sometimes buyers will ask for repairs of items that were clearly visible before an offer has even been made.
When I am representing a buyer I will always advise them not to ask for repairs of items they knew about before writing a contract and based of the amount of work that needs to get done make the appropriate offer.
Push For Credits Instead of Repairs
When selling your home and subsequently negotiating home inspection items, you should always push for a closing cost credit or a price reduction whenever possible.
There is simply too much stress and uncertainty in putting yourself on the line for repair work if you can avoid it. The buyer is likely to be extremely picky about the quality of the work and you could wind up being asked for even more work if he or she is unhappy.
This is why most Realtors will recommend you offer the cash value of the repairs – negotiated down as much as possible – instead of offering to do the repairs yourself.
It is easy to see how you can get into trouble here. Say the roof over your garage has hail damage that the buyer demands be fixed. You agree that repairs need to be made and offer to have them done before the closing takes place. Two things happen: First, the repairs take longer than you thought and potentially end up delaying the closing if the buyer or their attorney will not agree to an escrow hold back. Second, the roof shingles are newer, so they do not look the same as the old shingles.
The buyer should understand this, but chooses not to, and demands you do something about it. Again in the second example the buyer could attempt to delay the closing creating stress for you especially if you have bought another home and you need to close on your home in order to purchase the other.
You probably would not be liable for any further costs in this particular situation, but you also just put yourself through weeks of anxiety and ended up with an angry buyer, all of which could have been avoided by just handing over the estimated cost of repair in cash or credit on the sale. The buyer picks his contractor and deals with the consequences while you move on.
Understand Negotiations
In most states you are not obligated to repair your home before you sell it, as long as you are upfront and honest through the course of the sale. However, you also want to sell the house to a buyer that is willing to pay what you want.
You must be willing to negotiate in most any type of market and repairs are one area where this is a must. The buyer can back out in all sorts of ways, leaving you searching for another to take the home off of your hands. Depending on the market, this can be a real serious headache.
One of the difficulties with going through the home inspection process and then not coming to terms with a buyer is the fact you and your Realtor may have to disclose everything that was discovered at the inspection. In many states this a disclosure requirement moving forward. This of course can make your home more difficult to sell.
This being said, just because you must negotiate and maybe spend a little money to ultimately sell, you do not need to give in to every demand. Haggling is an art anyone can learn, and you should have a Realtor with you to help in the process as well. Know the value of what you are trading and look out for your bottom line. This is another one of those times where having an exceptional real estate agent in your corner really comes in handy.
In practical terms, this means focusing on what is best for you. There may be 20 things that could possibly need repairing, some big, some small. You do not have to take care of all of them, but you may need to take care of some. For instance, the buyer may come to you with a list like this:
- Cracked tiles in bathroom
- Sod replacement in corner of yard
- Fence repair in backyard
- Leaking pipe in basement
- HVAC system replacement
- Old above ground swimming pool removal
Most of these problems could be accomplished by a contractor or two for small amounts of money, except for the HVAC replacement. This is where you have to decide your strategy. Which will cost you less? Which things are you willing to do? In this particular situation, you may really want to avoid replacing the HVAC system. It will be expensive, the old one still has a few more years left in it, and you do not really feel like you should be responsible for it.
If this is the case, offer to do all the other smaller repairs on the list. You can even explain that the old HVAC is a result of buying the older home you are selling and that the price reflects this. Make it understood that you are willing to do a lot, but there is only so much they can reasonably ask. Appearing reasonable and acting in good faith can ease your way through these negotiations.
The same is true for the actual repair costs. Make relatively low offers based on your estimates. You can always give a little to come nearer the middle, but you cannot go back down after you make an offer. This is just like haggling for a car or even a piece of fruit at the farmer’s market.
One of the best ways to avoid your home sale going sour is to know what the most common home inspection issues are and deal with them before you even put the home up for sale. Over the years I have come to realize that many home owners get so comfortable with their environment they never stop to take a hard look around to see if they have any problems that are sure to crop up. Doing a once over of your property before putting it on the market can really make a difference!
Do Your Best And Trust Your Realtor
Depending on the state of your home, you may not be able to get every last penny you hoped. However, selling for a good price is worth spending a little money. Trust your Realtor to guide your choices and do your best to negotiate with skill, and you should be able to sell without spending more than is reasonable.
Remember that navigating your way through the home inspection process is important. Don’t become stubborn and refuse to take care of issues that are sure to come up again with a different set of buyers. It is important to recognize problems that will be issues with anyone and deal with them. Unless it is an incredibly strong sellers market where you can get away with telling a buyer they need to take the home “as is” then make sure you are reasonable. Doing so will lead to a smile on your face when you are shaking hands with a buyer at the closing table.
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The above Real Estate information on how to negotiate issues after a real estate home inspection was provided by Irene Trivoulides, Associate Broker with Linton Hall Realtors. Irene can be reached via email at irene@findyourdreamhome.net or by phone at 571-233-5449. Irene has helped people move in and out of many Northern Virginia towns for the last 19+ Years.
Thinking of selling your home? I have a passion for Real Estate and love to share my marketing expertise!
I service Real Estate sales in Northern Virginia including the following areas: Gainesville, Haymarket, Warrenton, Bristow, Manassas, Centreville, Chantilly, Fairfax.
