You’re excited that you have a purchase contract. Now, are you ready for the home inspection results? The post-inspection negotiation is often as critical as the price negotiation. Many home transactions crumble when buyers and sellers disagree over who should pay for what.
Home sellers usually aren’t too excited to spend more money and effort after they’ve already done so to get their house ready for the market. But most purchase contracts come with a home inspection contingency. Buyers want to feel satisfied that they aren’t paying for a house with any major defects. After the inspection, there are many things they could ask for that will cost the seller money, effort, or both.
A seller’s decision to give what is asked usually comes down to several factors: necessity, cost, and motivation.
Necessity. Anything that can cause harm or present future liability to the seller should be seriously considered as a necessity for repair. If a defect is considered a safety hazard, such as an electrical problem, then there is more pressure on the seller to fix the problem. If a radon test proves a high presence of radon, this is a health issue and buyers will want a radon mitigation system. If a roof is at the very end of its life, buyers may ask for a replacement or a price reduction for having to take care of it themselves.
Cost. Repairs that are considered essential or practical can be easier to convince a seller to fix. A seller is less likely to balk at requests to replace weather stripping or to caulk a shower than pricier fixes like replacing an older furnace, air conditioner, or windows. Conversely, buyers should not nit-pick with requests on every little nick or chip they find in the house. Don’t overwhelm a seller with a long list of items. Remember, we’re not dealing with a brand new home. Buyer’s should limit requests that are most significant to their concerns.
Motivation. If a seller is highly motivated, they may be more willing to concede to specific requests, within reason. Sellers are more likely to handle repair when the price offer is solid rather than low. They also may react more favorably to buyers with better financing capability, since shaky financing is a risk to ending the deal regardless of the seller’s post-inspection activity. The demand of your market can also affect the seller’s motivation. If the home is in a high-demand area, a seller may be less willing to make repairs, knowing that another buyer is easy to attract. If the home is in a low-demand area, the seller may be more willing to make repairs, knowing another buyer is hard to attract.
A seller can obviously say no to any request and a buyer can either accept that or back out of the contract. The two parties can compromise on what will be fixed and what won’t. Alternatively, they can compromise so that the seller pays a portion of an estimated repair or replacement cost. Sometimes a seller is willing to reduce the price of the home a certain amount (or give back cash) instead of expending the effort to repair. Obviously there are many opportunities for negotiations. An experienced real estate agent has seen many different post-inspection situations and can suggest logical ways to come to an agreement.