7 Tips: Negotiating Repairs After a Home Inspection
Determine What You’d Like the Seller to Repair
While every situation is different, the buyer or seller may split some – or all – of the repairs that appear on the inspection report. Other times, the buyer will be solely responsible, or the seller will be responsible. When reviewing the inspection report, determine which items you would prefer the seller to repair. As a buyer, always try to come to the seller from a kind, courteous place. Hefty negotiations will most likely take place – which your realtor will handle for you. Your realtor should also help determine which repairs the seller should handle and which will be your responsibility.
Discuss What Repairs Are Most Important
Bear in mind that nearly all homes will have issues – no house is perfect. When reviewing the list, break it down into three sections: 1) major, glaring defects that will be extremely expensive to repair 2) issues that are not overly costly but also not cheap, and 3) small, minuscule items that are not of immediate importance.
Try to focus on the major defects as opposed to the issues that aren’t as important. When buyers become focused on the smaller, less pressing items on the list, they may lose sight of significant issues that will be the most expensive to fix.
Get a Quote for Repairs from a General Contractor
After receiving the inspection report, the buyer may feel inclined to ask the inspector for pricing estimates on how much the repairs will cost. In almost every situation, the inspector will be unable to provide an estimate. A contractor, on the other hand, can give some ballpark numbers. Your realtor may also be able to provide some estimates. Additionally, your realtor may be able to put you in contact with recommended contractors. Chances are if your Realtor has been in the real estate industry long enough, he/she has a general understanding of standard repair costs. After your realtor has put you in contact with a contractor, provide a list of the items you want them to complete and they should have an estimate on approximately how much everything will cost.
4. Would you Prefer Money or Repairs?
If you are a seller, it is advised that you offer repair money (typically referred to as a ‘credit’) to the buyer instead of handling the repairs yourself. A credit brings down the buyer’s closing costs to help offset repair costs. In doing so, the buyer can then handle the repairs on their own without getting the seller involved.
As a seller, you won’t run the risk of the buyer continually checking in to ensure the repairs were completed. They may also demand that additional work be completed if they are unhappy with the initial repairs. Serving as the middleman between a contractor and a buyer also puts more items on your to-do list when you’re in the process of moving. It is always best to let the buyer find the contractor and oversee the work on their own. Providing the buyer with monetary credit typically provides the funds necessary for the buyer to pay for repairs.
If you are a buyer, it is advised to take a monetary credit rather than let the seller oversee the work. Your expectations are most likely very different than the seller’s, so it is best to negotiate a credit so that you have extra funds to put towards the work. That way, you can oversee everything from start to finish and will not have to discuss repairs through a middleman (the seller).
Understand the Seller is Not Obligated to Make Repairs
Buying a home brings out many emotions. There is the initial excitement of finding a home, and then some stress and tension may arise if the seller refuses to pay for repairs. Take a moment to take a step back and assess how much you want this home. Is this the house of your dreams? Are the repair costs outrageous or manageable? If the repair costs are manageable, you may kick yourself later if you choose to walk away simply because the seller wasn’t willing to throw in a little extra cash.
Approach the Request for Repairs with Gratitude vs. an Attack
The worst way to communicate with a seller is by demanding that they pay for repair costs. The repairs are typically just as much of a surprise to the seller as they are to the buyer, especially considering most repairs that appear in an inspection report are hidden beneath the surface of the home, tucked away out of sight. The sellers may have been living in a home with a faulty foundation for years and had no idea until they viewed the inspection report.
Try to Understand the Seller’s Point of View
Although it is easy to feel anger or resentment toward the seller, understand where they are coming from as well. Sellers have tons of costs and fees that they must consider, and repair costs are unfortunately not always their top priority. They may want to help the buyer with repair costs to expedite the deal, but may be strapped for funds and simply cannot afford to put money into repairs.
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