Finally! You’ve found the perfect house, in the school district you wanted, and you can picture you and your family creating an amazing home here. Even better, you made an offer that the seller accepted, and now all you need is a complete home inspection before money can exchange hands, and you can get the keys to your dream home.
A home inspection is an incredibly important step of buying a new home and negotiating repairs so you’re not left with hefty costs of repairs that you shouldn’t be dealing with.
Importance of Negotiating Repairs
In any home that’s not newly constructed, the inspector is bound to find issues, and you may discover that as much as you like the house, it might be a bad investment. In this case, you’ll have an average of 10 days to pull out your offer. If the issues are not dire, however, you can renegotiate the initial price to take care of all the repairs found.
How you handle the negotiations for these repairs can make a big difference in how much you end up paying for the house, and how seamless the process is. For this reason, we bring you seven of the best tips that will help you in negotiating repairs so you can get that house for the right price.
1. Push For Repair Money and Not Repairs
If it looks like the deal is finally going to close, the seller is probably packing and looking forward to the next chapter of their life. Making repairs for the house they are moving away from is nowhere near their top priorities, and even though they must oblige to finally close the deal, the repairs may not be to your standards. The best thing to do here is to ask for credits, which means you’ll get a certain amount of money at closing so you can take care of all the repairs yourself.
What makes this an incredible idea is the fact that you won’t have to go back and forth with the seller about how badly the repairs were and how you need more credit for a shoddy job. With repair money, you can use a contractor you trust and give instructions to have everything repaired as you deem fit.
Beyond this, if the repairs are delayed, the closing date will delay too, and this could mean a locked-in interest rate for your mortgage.
2. Don’t Trade Dollars for Pennies
Once you have a list of issues that need repairs, it’s unwise to trade dollars for pennies. This means you need to know what’s worth negotiating, which is, of course, the most significant issue. Any major issue that would lead to significant costs should go to the negotiations table.
The trick here is not to give the seller the whole list of repairs. You see, what they’re likely to do is choose the least expensive repairs and get them done.
When you get back to negotiating repairs again, they will claim to have done too many repairs and can’t do anymore. What they have done, though, is taken care of the doorknobs and the cabinet doors that won’t close, then left serious issues like a sagging roof, a busted water heater, or a cracked foundation unresolved.
These major repairs can run into thousands of dollars, so let the seller take care of that, and you can, later on, fix the cosmetics. Besides, you need to be realistic by not expecting a home to be in pristine conditions.
For ultimate bargaining power, present the seller with the major issues you can’t afford, and if you really like the house, you can take care of the rest later on.
3. Be Ready for Anything
It’s not over until it’s over. Until you have signed all the closing documents and get the keys, anything can still happen, especially when negotiating repairs. Even after you’ve signed the initial contract, you’re still not off the hook. You may not be able to negotiate a lower price because of the necessary repair costs.
There are many people involved, other buyers who would like the house, the market could be competitive, and other factors may influence the seller’s decision. If they feel you’re demanding too much, there’s always a chance they could give the house to a buyer that’s more lenient.
4. Allow the Seller to Pay Using the Escrow Money
Most often than not, you’ll find that sellers don’t have enough savings to get into the kind of repairs a house needs during a sale. Regardless of how good of a negotiator you or your agent is, it’s impossible to get something from someone that doesn’t have it. You don’t need to walk away from the deal simply because the seller cannot settle the repairs.
The best course of action is to make the sale contingent and agree that they will set aside repair money from the sale proceeds. This is usually a win-win situation for both buyer and seller because you’ll get a house you love and do repairs without spending money, and the seller sells the house and moves on without much stress.
5. Pay Attention To Market Conditions
The market condition could have a huge impact on what the seller is willing to do and agree on. With multiple offers, the seller is not likely to cave in to some of the repairs you ask for, especially if you bring in a long list of every little thing the inspector found. Take note of the market conditions and know what to push for, and when to push if you absolutely want to get the house.
6. Take Your Time In Making a Decision
Even with the best intentions, sometimes you just can’t come to an agreement with a seller. In this case, you should take your time to make the ultimate decision of whether to push the negotiations further or take the deal, despite some repairs.
Keep in mind that you can’t win in every little situation, so avoid putting a great deal in jeopardy for the little stuff you can easily take care of. There is a fine line between quitting and negotiating further, and you should know when you cross it.
7. Know When to Give Up and Walk Away
If it gets to the point where neither you nor the seller wants to budge and give in, walking away may be the best option. Not every deal can be salvaged, even if you brought the best negotiating tactics.
In a seller’s market, the seller is likely to hold most of the power, and it’ll be up to you whether you should accept their terms or move along. Consider that you’ll be living in that house for years to come, and if you’re not confident enough, it may be best to walk away and find something better.
Apply These Tips for Negotiating Repairs After Inspection
There you have it! Now you know how to go about negotiating repairs and the tactics that will get you the best price. It’s vital that you ask for the most significant repairs and take care of the cosmetic stuff yourself once you move in.
If you need a professional inspection company for an unbiased third party inspection, please get in touch with us to schedule an inspection, and our experts will give you the best services in the market.