Whether a home is an investment or a place to hang your hat, both seller and buyer want the best deal.
They go back and forth negotiating price until someone finally acquiesces, and you hope it’s the seller. One of the best real estate negotiation moves is to have a home inspection.
It can be leverage when talking with the seller not only about final price but also about repairs. You may have fallen in love with the marble countertops or the hardwood floors, but it’s the nuts and bolts of the home that is most important.
Learn how to use a home inspection as a negotiating tool and you’ll be moving into your new home in no time.
What’s Involved with A Home Inspection?
A home inspector’s job is to look at every nook and cranny of your home and make sure everything is up to code. They warn you of everything that needs repair. They’ll make sure every light bulb turns on and electrical outlets work.
They’ll watch for seepage in the basement and water marks in the ceiling. The look at the wiring and existing appliances. In the end, they create a detailed report with all their findings.
No home is perfect. There will always be information on repairs both big and small. What matters is what you do with that information.
They’ll see home repair issues that you as the buyer never would. With the report in hand, it’s time to go back and negotiate.
Real Estate Negotiation 101: Ask for Repair Credits
If there are major or medium level issues that need repairing, make sure the current owners take care of it. Don’t let them make the repairs though.
The sellers are halfway out the door and don’t want to put any more money into their current house. If you have them repair it, then they might cut corners to save time and money and you’ll end up needing more repairs in a few years.
Instead, ask for home inspection credits. You know you’ll need to make the repairs, but it shouldn’t be your responsibility. Credits can include a reduction in closing costs, final asking price, etc.
This is also beneficial to sellers as well. It’s possible the total repair costs could exceed the estimate.
You don’t want to be on the hook for a huge repair cost. By allowing credits, you acknowledge the repairs, but don’t have to make them yourself. Once the house is theirs, everything is their responsibility.
Also, repairs can take time and you want to sell the home as fast as you can. Don’t delay the buying process because of costly repairs.
Don’t Nickel and Dime the Sellers
As we said, the home inspection takes everything into account both big and small. It’s important to include major repairs into negotiating house price after inspection but don’t nickel and dime the current owners.
There are certain aspects of repairs that are wear and tear on the home. If there are some cracked tiles or windows that need caulking, it’s not worth using them as a negotiating tactic.
For one, there are likely renovations you’ll want to do, and you’ll take care of the small items. Secondly, the sellers already have one foot out the door. They don’t want to go back and spend days or weeks making the house pristine.
Instead, they’ll tell the Realtor that they’re not interested in selling to you and move on to the next person.
Don’t Count on the Inspection for Leverage
Many times, the inspection is the final step before the final negotiation.
You’re saying, “We’re interested in the house, but before we buy, we need to get it checked out,” You’re down far in the sales funnel but don’t count your chickens before they hatch.
Some people agree to a higher price expected to use the home inspection repairs as a reason to ask for a reduction. While no house is perfect, it may not have enough issues to use as a strong bargaining chip.
If you try to seek a lower price after a good inspection, then you irritate the seller.
They’ll move on to the next buyer rather than deal with you. Always assume the inspection will be good and then use the results for negotiation.
Don’t put the cart before the horse.
Don’t Show Your True Colors
You need to have a good poker face when negotiating a real estate deal and buying a home.
During the inspection, it will likely be you, the inspector and either the owner or their real estate agent walking through the home. Don’t give the seller or their representative, any inclination you love or hate the home.
You need to be dispassionate about the inspection.
If not, then they can use that against you during negotiations. If you go through the inspection complaining about everything, then it might irk the seller. They’ll either not budge on pricing or discount you as a buyer entirely.
If you go through the inspection beaming and measuring for curtains, then they’ll know how much you love the house and won’t want to lose it. It’s best to keep them guessing, so you have the best negotiating experience.
Sometimes It’s Not Worth It
When the seller learns about the inspection and refuses to budge on any issues, then it might be best to walk away.
If there are major water or wiring issues, then they likely already knew about it. If they’re not willing to compromise, then that should send up red flags.
It might mean nothing, but it could also mean there’s more than meets the eye. If negotiations break down after the inspection, then walk away and find something new. There are plenty of houses on the market.
Negotiating Real Estate is an Art
Real estate negotiation is an important part of buying and selling a home. The home inspection can give you leverage to reduce closing costs and the price, but only if used effectively.
If you want to learn about the importance of home inspections or to use them to your best advantage, then explore our website today.