How to negotiate failed home inspection items.

Failed home inspections break a lot of deals. We prepare our buyers by letting them know that the home inspections are usually followed by a time of negotiation and weighing out options.

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When buying a home, it is normal and recommended that you hire a licensed home inspector to inspect a home before your inspection period is up. In our experience, every single inspection report has something that fails. Some items can be small like a cracked switch plate, while others can be big like a sinkhole that is causing settlement problems.

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Evaluating your inspection report

Before you ask a seller to make a laundry list of repairs, you first need to distinguish what is a real problem and what is just something to know. Inspectors note anything and everything that is or could be an issue. We once had a large sidewalk crack noted and the buyers were terrified of it being a sinkhole issue. In reality, it was likely some sort of a tree root issue and was too far away from the house for it to have been a structural concern.

On the other hand, when the inspector notes a federal pacific electrical panel, this is a problem and a reason why you will not be able to obtain insurance on the house. If there is an undersized AC unit, this is an obvious problem and it raises red flags as to why, who, and how it was installed in the first place.

These failed inspection items fall into the category of something you would not have normally known about without an inspection and they can cause serious, potentially expensive problems.

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Asking

Although it would be nice to have a conversation with the seller about repairs, sellers agents tend to get in the way and communication becomes filtered. The formal ask comes in the form of an addendum to your purchase contract. This is where you list what repairs you are requesting the seller to complete.

On your repairs list, you must be specific. When you just say repair AC system, it leaves room for interpretation. If there is any room at all for interpretation, you risk a situation in which a seller claims they completed a repair, but it isn’t 100% what you wanted to be done.

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Tell them why

When asking someone for anything, the odds of them doing it are increased drastically when you give them a reason. So when you ask for repairs, say exactly why you are requesting the repairs you want. If it is an insurance concern, a safety concern, or if it is a repair cost concern, say that in your addendum or the seller's agent may never communicate why.

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Create accountability

You never want to run into the situation in which you are going to closing and the seller still hasn’t made repairs. This can put you into a situation where you have to decide if it is worth it to just move forward, to continuously push out closing, or just cancel the contract.

We recommend putting a timeframe with a penalty in place in the event the fix is not made on time. Most of the time, sellers do not fix everything by the due date, and many times, sellers don’t complete all the repairs they agreed upon at all.

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Before you buy a home, get an agent who has a plan for the tough tough stuff. Call today or fill out the form here to get in touch.

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