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When you’re in the process of buying a house, negotiating after you’ve completed your inspections is a big deal. After all, it’s only natural that you would want your new home to be in the best shape possible once you become its new owner.
With that in mind, we have a few tips on how to negotiate inspection repairs like a pro. Read on below to learn everything you need to know.
Know your options.
Before you sit down to negotiate, it’s important to have a clear sense of the options that are available to you. In an inspection negotiation, you have essentially four main options:
1. You can ask the seller to make repairs
This is the simplest option from your perspective. In this case, as the buyer, you’ll usually stipulate that the sellers have a licensed professional do the repair and that’s it. The repair will be done before you close on the home.
Sellers, however, usually don’t care for this option because it puts more work on their plates. Since they won’t be living in the home for much longer, they also have a tendency to choose the cheapest person to do the repair.
2. You can ask the seller to give you a credit at closing
On the other hand, this is the easiest option for sellers. Here, you simply negotiate a price for the work. Then, at closing, the sellers will take that amount from their proceeds and use it as a credit towards your closing costs.
Then, once you own the house, you’re free to do the work however you see fit and on your own time.
3. You can ask for payment for the work to be left in escrow
This is where things get slightly more complicated. When you ask for payment for the work to be left in escrow, the sellers write out a check for the amount needed to pay for the work. It’s then held in escrow by a neutral third party until you have the work completed. Then, you use the check to pay the contractor.
It’s complicated because real estate and title companies usually don’t like to hold on to money for buyers and sellers after a closing has taken place. You may have to get special permission to go this route.
4. You can walk away from the deal
In real estate, your inspections are contingencies, which means if you’re not satisfied with the results, you can walk away from the deal with your earnest money deposit in hand. If you think that the house requires a lot more work than you can handle, don’t hesitate to use this contingency to back out.
Stick to asking for the big-deal items
Now that you know more about the options that are available to you, the next step is to think about what items you’ll want to ask for in your reply to inspections. In this case, it’s important to stick to the big-ticket and safety items.
Put simply, if you ask for a laundry list of big and small tasks, the sellers have the opportunity to pick and choose which items on the list they are willing to do. Odds are that they will pick the easiest and most cost-effective items, leaving you to handle the rest.
However, if you only put crucial items on your list of negotiable repairs, then they will become the focus and there is no chance that they will get lost in the shuffle.
Get cost estimates if you’re asking for a credit
If you’re asking for a credit from the sellers, one of the most important things you’ll need to do is to come up with an amount for it. Left on your own, it can be hard to pull a fair amount out of thin air, which is why it’s always a good idea to get an estimate from a qualified professional.
In addition, doing this will give your claims more credence in the eyes of the sellers. Put simply, it’s hard to argue against paying a particular amount of money if there’s a professional who’s willing to put in writing that it’s how much the work will cost.
View negotiations like a give-and-take
Finally, it’s important to remember that negotiations like this are always a give-and-take, meaning that there has to be some benefit for both you and the sellers. While you may be able to negotiate some of the repairs on your list, you likely won’t get everything that you ask for.
With that said, make sure you’ll have some money left over after you close on the home to make any necessary repairs that may, unfortunately, be left off the list.