If you’re looking to buy a house, it’s easy to get swept up in the excitement of future dreams. But, purchasing a property is no cheap investment. In fact, it’s probably the most significant purchase you’ll make in your entire life.
In recent months, the average US residential property value has dropped to $247,084. So, now might be a great time to browse the market.
You might already have your eyes on a property. But unless you’re buying a brand new building, each house comes with second-hand damages.
These could affect the value of the home and/or be expensive to fix later down the line.
This is where a home inspection is worth its weight in gold. It’ll reveal such problems with a house and give you an idea of how much it’ll cost to fix. Luckily, you can use any repairs that need doing to negotiate with around closing to get the best deal.
With all that in mind, here’s what a good negotiation after home inspection looks like…
Good Negotiation After Home Inspection
Always aim to make a reasonable offer based on what you know outside of the home inspection. Any repairs noted during the inspection are then a contingency.
This means you are not bound to the contract if you can’t come to an agreement where these unexpected repairs are concerned.
As a result, you have renewed negotiation power as a buyer and might be able to bring down the cost or get credit to offset closing. This is why it’s always worthwhile ordering a home inspection.
Usually, this is done 7-10 days after your offer is ratified. Come prepared, and know what questions to ask during a home inspection.
You’ll get a list of items that are not in ideal condition. Try to focus on the major repairs or anything mechanical or structural, or might present a safety hazard.
The smaller items will be easy enough to fix and might only lead to high-stress negotiations if pressed.
Ask for Credit for Any Work That Needs Doing
The sellers are ready to leave their old property behind. This means they probably aren’t interested in fixing the house up before they hand it over to the new owners.
At least they won’t be likely to spend as much time and money on the task as you might have done as the new owner. Instead of leaving work to the owners, you can ask for cash-back credit at close of escrow.
You can use this money to complete the project yourself at a later date. If you get the credit, there will be less back-and-forth to ensure that the seller has done the repairs correctly as well. This could save some time leading up to closing.
Think About the Bigger Picture
Asking for credit instead of repairs has another benefit. It could offset your closing costs when the repairs in questions are minor or don’t matter to you. Think in the longterm.
If you intend to renovate the kitchen, chances are you don’t need to demand repairs to the tiles or the counters before the house is yours. But as the repairs are still up for negotiation, you can ask the seller for credit to put towards other uses.
Keep Your Cards Close to Your Chest
During the inspection, it’s likely you’ll be accompanied by a listing agent, your own agent, and the inspector.
You should avoid revealing how happy you are with the property at this stage. Otherwise, the listing agent might use your enthusiasm against you.
If you’re too enthusiastic, you’ll lose negotiation power. But, if you’re too cynical, this might be relayed to the seller, which could prompt them to negotiate with other interested parties.
Don’t just keep your feelings close to your chest, but your plans too. For example, sellers will offer less credit for the repair of kitchens cabinets if you reveal you’re gutting the kitchen.
Get a Quote for Any Outstanding Repairs From a General Contractor
Once you have the inspection report in hand, you might feel inclined to ask the inspector for a pricing estimate. Instead, speak to a contractor that can give you actual ballpark numbers.
Your realtor may also be able to help with estimations or put you in touch with recommended contractors. This could give you an accurate idea of what costs you’ll face if you take the property as-is.
Understand the Seller’s Perspective
When you negotiate for repairs, remember that the sellers are not obliged to make them or offer any credit towards them.
This is part of sale negotiations, but they have every right to deny this, and you might have to cut the property loose if the repairs are too much for you to handle.
Remember that the seller will often be unaware of the things that need fixing themselves, and won’t have considered these costs until they come up in the home inspection.
A good negotiation after home inspection should treat sellers and buyers alike with respect and kindness. Remember that sellers also have tons of costs to cover and that repairs are not always their priority.
They may wish to help, but they might also be strapped for funds. If the house fails inspection, be prepared to handle this and possibly walk away.
Get the Best Deal After a Home Inspection
A good negotiation after home inspection could save you some extra money and take some of your burdens away. Follow these negotiation tips to get the best deal and agree on an offer that suits the house’s condition.
For more information on home buying and inspections, please feel free to contact us today!