Can You Negotiate After a Home Inspection?

It has never been a more exciting or easier time to purchase a new home. In fact, more and more new buyers are entering the housing market to capitalize on low interest rates and increasing property values. According to the National Association of Realtors, 35% of all home buyers are first time homebuyers¹.

But as a new (or even seasoned) buyer, you may not want to jump at the first home you come across. Even when you do find your perfect dream home, it's important to take your time and do your due diligence by addressing any issues with the property before signing on the dotted line.

One of the best ways to identify and remedy issues with a home is by having a home inspection completed during the home buying process. While no property is without its issues, it's important to discover repairs that could impact it's safety and soundness.

If your inspection report does come back showing a need for excessive repairs and remediation, don't jump ship just yet. You always have the option to negotiate repairs after a home has been inspected. If you REALLY want to get do a deep dive, we recommend you read our ULTIMATE guide to negotiating after a home inspection.

RepairPricer makes the process even easier by turning any home inspection report into a highly accurate repair estimate within 24 hours, getting you back on track and ready to close as soon as possible.

While it can add an extra step to the homebuying process, it's better to have a seller handle any necessary repairs than be on the hook for known problems that, if not addressed, could spiral into thousands of dollars out of your own pocket.

Here are some common household problems that can be found with a home inspection report, as well some things to consider for handling the negotiation process with your seller.

You always want to buy a home that is up to current codes and standards, but sometimes issues do come up. When you receive your inspection report back, it's important to first differentiate and identify any ordinary defects the inspector notes from material defects.

An ordinary defect can mean a lot of things, but usually refers to something an inspector finds that is damaged, broken, or worn-out. This is distinctly different from a material defect which refers to something that negatively impacts or alters a home or home systems, which may put you (as the homeowner) at risk.

The International Association of Certified Home Inspectors specifically identifies a material defect as “a specific issue with a system or component of a residential property that may have a significant, adverse impact on the value of the property, or that poses an unreasonable risk to people².”

Negotiating repairs for any issues found on your home inspection report can often be dependent on the extent of the work needed and what the seller is willing to compromise on.

If you can, try completing the walkthrough with your home inspector so that they can explain the inspection process. It is also a great opportunity for you to ask questions and hone in on any potential red flags identified throughout the home.

Here are some of the most common household repairs that home inspectors identify during a home inspection:

1. Electrical - faulty or fraying wiring, broken outlets, improperly wired electrical panels
2. Plumbing - water damage, leakage, poor water pressure, drainage issues
3. Foundation - cracking and/or chipping, water damage, material degradation
4. Roof - missing shingles, leaks, eroding material surrounding the chimney
5. Windows and Doors - rotting, broken panes, failing seals, cracks, draft leaks
6. Mechanicals - refrigerant lines, ductwork, ventilation, improper heat distribution
7. Appliances - improperly functioning, leaking, carbon monoxide build-up
8. Mold, Mildew, and Asbestos - build-up (bathrooms, crawlspaces, ducts), lead paint
9. Bug/Pest Infestation - fecal matter, nesting, dead bugs, material degradation

You can always negotiate after a home inspection, but the timing and specifics may vary depending upon your state, contract, and findings report.

However, it's important to realize that a seller is not legally obligated to pay for repairs. A seller may be willing to negotiate repairs so that you don't walk away from the deal, but housing market trends may also heighten or lower seller tolerances for out-of-pocket repair costs.

Also, keep in mind that getting a home inspection is usually a buyer's expense. If you do choose to walk away from a deal based on the findings in your inspection report, you may lose the money spent for your inspection report.

After you receive your initial inspection report, discuss with your realtor what repairs you want remedied and what items you can stand to live with. Minor repairs that are more cosmetic in nature may seem trivial to a seller and could also be less expensive if fixed yourself. Instead, focus on big concerns, especially items that pose a potential safety risk or that severely impact the value of the home.

Asking a seller to make repairs is a common request. It also shifts responsibility over to the seller and can be fairly easy to accommodate depending on the extent of the repairs in question. Make sure you have an estimate ready that you can provide to the seller as an approximate the costs for the repair work. Not all sellers are willing to make repairs so always be ready with a backup plan (or even to pull your offer) if your request is declined.

Some sellers may not want to complete repairs because it can add additional stress while they are moving or even elongate the sales process. Alternatively, if you have a seller that will not make repairs, ask for a reduction on sales price or request a seller's credit to offset repairs that will eventually need to be completed. It's a win-win because they don't have to complete the work and you can be compensated to take care of the work post-close.

If you can't sweet talk your seller into completing repairs or compensating you with either a seller's credit or price reduction, asking them to throw in a seller paid home warranty to cover issues that may arise during your first year as the homeowner is a reasonable request. While home warranty policies may require a deductible, they can help offset costs for broken down appliances or even system issues (plumbing, electrical, heating/cooling, etc.).

• First-time Home Buyer Share Rose to 35% in June 2020 as Mortgage Rates Hit Record Lows. (2020, July 23). Retrieved September 7, 2020, from https://www.nar.realtor/blogs/economists-outlook/first-time-home-buyer-share-rose-to-35-in-june-2020-as-mortgage-rates-hit-record-lows
• Material Defects Defined for Home Inspectors. (n.d.). Retrieved September 7, 2020, from https://www.nachi.org/material-defects-for-home-inspectors.htm#:~:text=1.2.,an unreasonable risk to people.