4 ways to win big after an inspection
Have you completed your home inspection? It sure helps to know about any potentially expensive repairs your new home may need. But is that all there is to home inspection?
The answer is no. You need to be aware of the next steps after receiving an inspection report. Today, we shed light on four important steps to follow once the home inspection is over.
Ready for the first step?
Step 1: Review the inspection report
Any qualified home inspector will provide a comprehensive inspection reportwithin 48 hours. After receiving it, be sure to review the report thoroughly. A homebuyer typically has two to three business days to review the findings and flag any issues for further discussion or negotiation.
Do you know that in 86% of home inspections recommend at least one repair? The home inspection report details all of this information from faulty appliances to structural repairs. That said, not all repairs mentioned in the report are critical.
Step 2: Discuss the findings with your agent
The next step is to sit with your real estate agent and discuss the findings. Your agent will guide you on identifying the repairs and notifying the seller. If possible, try not to negotiate on any repairs that may seem unnecessary or minor to you or your agent.
Doing so may aggravate the seller. The deal may fall out – and poof! You’ll be back to square one.
Some typical examples of unreasonable requests are:
- Cosmetic repairs, such as cracked tile, a nicked-up paint
- Suggesting repairs that you’re already planning to do as part of a renovation
- Inexpensive fixes like smoke detector replacement
- Superficial landscaping fixes
Step 3: Ask the seller to make the repairs
If theinspection report brings up major issues—including but not limited to a faulty electrical system, malfunctioning water heater, leaky roof, or other significant structural defects—it’s only fair to ask your seller to proceed in making those repairs. Then the repairs become a requirement of the sale, meaning that in order for you to sign on the dotted line (over and over again, as you will) this needs to be done first.
Remember to always communicate in writing with the seller through the Buyer Request for Repairs (RR) form. (Your real estate agent should provide this to you.) Begin by listing the priority repairs in the RR form and accompanying it with theinspection report.
The best way to rank repairs is by cost and severity. It must include repairs that are potential dealbreakers. Also, create another list with repairs that you’re willing to pay for yourself. This shows the seller how serious you are about the repairs.
Step 4: Assess seller’s response and negotiate
This is where you and your agent should be proactive and negotiate carefully with the seller. If the seller indicates that they’re willing to make them, then you add them to the repair addendum in your contract.
If the seller isn’t willing to make the repairs, then you can certainly try to negotiate for price concessions. In some instances, the seller may agree to give concessions in order to sell the house “as is.” You can also ask the seller for cash credits from the proceeds (if the lender permits) so that you can make the repairs yourself.
Some sellers might reject giving concessions or taking on repairs outright. This is your cue to invoke the home inspection contingency and dissolve the contract altogether.
Arm yourself with the inspection report!
No doubt, the home buying process can be a challenging journey. Both parties might need to negotiate intensely to get what they want. But even the most meticulous of sellers may miss some flaws in their home (we’re all humans!) To that end, a home inspection report is a crucial tool at your disposal for bargaining a better price. Use it judiciously.