No home is perfect. If you have completed a home inspection and issues have been found in the home that need to be fixed, what do you do? You can take a number of routes to negotiate for repairs, but each option should be carefully considered in order to benefit all parties.
Renegotiating The Home Price
If an inspection finds the home in need of repairs, you can renegotiate the price with the seller. Home repairs affect the selling price of a home, so it is critical that you provide a copy of the home inspection report to the seller, especially if they have done a pre-home inspection. This will allow you to work with the seller how the problem will be fixed.
If there are major problems with the home, the seller should be open to lowering the price in order to compensate for the money you’ll lose making these repairs. Sellers also tend to renegotiate more if the home has been on the market for a long time and they are keen to part with it.
Requesting A Fix By The Seller
Some sellers are more than happy to make some repairs if it means making a sale, but don’t let this lull you into believing all sellers are willing to make repairs. Sellers are under no obligation to make repairs except under certain circumstances before a lender will loan out like:
- Structural defects
- Building code violations
- Safety issues
Cosmetic repairs are not required, and if you’re buying “as is” or the seller requests an information only inspection, you may not be able to get repairs. However, this hard line is generally reserved for highly competitive housing markets.
If the seller responds that the repairs are your responsibility, get your own estimate on how much they will cost to prevent overpaying.
Cancelling The Purchase Agreement
If you and the seller cannot agree on a repair or price negotiation it may be beneficial to walk away completely. This can save you a lot of time and money in repairing the home yourself—something most people, excluding the hardcore DIYers, will balk at.
Therefore, you may have to cancel the purchase agreement. This is not a simple process as cancelling a contract can have repercussions like loss of deposit or being sued for breach of contract.
But don’t let these possibilities scare you or pressure you into buying a home. Adding a contingency clause to the purchase agreement, like the ability to cancel if an inspection finds something wrong with the home, will help protect you from liability in the event you have to terminate it.
When negotiating repairs and prices after a home inspection, it is vital that you have your lawyer present to help you navigate the legal waters. It will save you a lot of stress and confusion as well as keep the process impersonal—you don’t want your emotions to run away with you and say something you’ll regret.
The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.