Home Inspection Issues. Now What?
After months of viewings, you’ve received an offer on your home. Following some back and forth, you’ve arrived at a figure both you and the buyer are happy with; and you’ve set the closing process in motion. It looks like you’re finally going to sell your house. Exciting, right?
But then, you hit a snag.
The home inspection report comes in, and it looks like there are issues. Understandably, your buyer is unhappy and wants to reopen the financial discussion. Which could mean a lot less money in your pocket, or even a chance of the sale falling through.
Managing Your Expectations
First and foremost, you need to be mentally prepared, even before the home inspection takes place. You might think your home is absolutely flawless, but the reality is that no home is perfect. If the home inspector does their job right, they’re bound to find at least some minor issues.
With that being said, you can – and should – do your utmost to make sure your inspection uncovers as few issues as possible. You can do this by going over your home yourself before the inspection takes place and making any necessary repairs.
You should also have dealt with any major issues – such as structural, plumbing or electrical problems – before you even put your home on the market. While this might mean considerable expense in the short-term, it’s much better (and far less stressful) to deal with major issues before there’s an unhappy buyer to contend with.
Giving Inspection Credits Is Better Than Making Repairs Yourself
If the issues look minor or you’re handy at DIY, you may be tempted to handle the repairs yourself. You should resist this impulse, as it’s hardly ever a good idea.
Now that the buyer has agreed to purchase your home and made a down payment, they could become very picky about the quality of the workmanship on any repairs. You never know what the buyer might take issue with. Even seemingly trivial things could turn into major sticking points, which will delay closing and eat further into your profits.
With this in mind, you should push for inspection credits wherever possible. In other words, negotiate a cash amount with the buyer. Or, alternatively, consider reducing your asking price. While this might seem unpleasant, it’s a small price to pay for peace of mind. Once you agree on an inspection credit, responsibility for any repairs (and their quality) shifts on to the buyer, leaving you free and clear.
Negotiating Inspection Issues: What You Need To Know
While you might think you’ve sealed the deal when you accepted the buyer’s offer, the truth is that a home inspection usually reopens negotiations, at least to a certain extent.
Thankfully, this doesn’t have to spell disaster for your bottom line, provided you approach negotiations strategically. The trick is to look at the situation from the buyer’s perspective, as this can help you sweeten the deal or even make what you’re proposing sound like a no-brainer.
Highlighting the benefits of inspection credits
You can make an inspection credit more appealing by pointing out that this gives the buyer full control on how a repair is completed.
This strategy works especially well with subjective repairs, such as new roofing or landscaping issues. Buyers will want to make their new property feel like home as much as possible, so they’re likely to find this appealing.
Some issues are non-negotiable
While your buyer might come to the table with a whole laundry list of repairs, you don’t need to negotiate all of them:
1. Upfront disclosures
If an issue was readily apparent before the home inspection, the buyer cannot bring it up during repair negotiations. With this in mind, you should disclose any issues you’re aware of to prospective buyers before they even make an offer. While they’ll probably use this knowledge to negotiate a lower sale price, it’s one less thing to worry about when the home inspection report comes out.
2. Replacing older equipment
In the same way, you’re not obliged to replace equipment that’s still in full working order, even though a home inspection report might note that it’s reaching the end of its life expectancy. Of course, the situation is completely different if you’ve advertised a feature as “new” when it actually isn’t.
Home inspections are subjective
At the end of the day, a home inspector is simply giving his views about the state of your home. No two inspections are alike; and an inspector might be making a big deal out of an issue simply because it’s their pet peeve. Bring this out during negotiations by always referring to the report as the inspector’s “opinion” and appealing to the buyers’ sense of fairness.
Trust your real estate agent
Most importantly, listen to and trust your real estate agent. A reputable realtor not only has the experience and know-how to guide you through repair negotiations successfully, but also has your best interests at heart.
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