Broker a fair price on your dream home to seal the deal
A home inspection report is a useful tool to negotiate a lower home price.
Up to 46% of homebuyers used an inspection to negotiate.
Negotiations can result in an average savings of $14,000.
Your real estate agent is your biggest support when negotiating.
Whether you’re buying your first or fifth home, the name of the game is getting the best possible price. This is where help from a local home inspection company comes in handy. One of your best bargaining chips is the home inspection report they provide for you. But if you’re new to the art of bartering, it’s important to fully prepare ahead of time. How you negotiate can either make or break the deal—or land you with some hefty repair bills after you move in. Here are a few things you’ll need to know before negotiating a home price after an inspection.
Yes, you can absolutely negotiate a suitable home price after an inspection. In fact, it’s in your best interest as a buyer to do so. According to a report by Porch, up to 46% of homebuyers used the results of their home inspection to lower the asking price of their home. This resulted in an average of $14,000 saved on the final home purchase.
From repairing a fence to replacing broken shingles, you can negotiate practically anything after a home inspection. However, there’s no guarantee that the seller will agree to your requests. When it comes to who pays for home repairs after an inspection, the seller doesn’t have to cover the costs of anything found by the inspector. But, in a buyer’s market, and if they’re desperate to sell, it is in the seller’s best interest to consider repairs to dealbreaker issues like bad plumbing, malfunctioning HVAC systems, faulty electrics, or a leaky roof.
Ideally, you would have a home inspection contingency added to your purchase offer. Basically, it’s a clause that lets you back out of the transaction in case the inspector finds major issues like structural damage. The seller could be unaware of red flags prior to a home inspection. If you’re still keen to purchase the home, negotiate with them for a price reduction or a repair credit, so you can hire a contractor to do the repairs.
Buying a house is an exciting venture, but the thought of haggling with the seller to settle on the best price may seem intimidating, and rightfully so—it’s not something most people do often. Here are some helpful tips to make the negotiating process easier.
Once you’ve received the home inspection report, go over it with your real estate agent. A good agent will have plenty of experience with inspection reports and recommend any repairs or concessions you should negotiate with the seller. They should also have an idea of what the seller is willing to agree to in order to move forward with the sale.
Your home inspection report will detail all issues—big and small—regarding damage, defects, and safety with the home. Make a list prioritizing the most critical problems, such as weak foundations, faulty wiring, or roof damage, poor ventilation and insulation, and inadequate grading and drainage over minor problems that are more cosmetic and easier to resolve. Also include concerns you consider to be deal breakers—costly things that require immediate attention that will make you walk away unless they’re repaired or compensated for.
It’s best to let minor cosmetic issues slide that you can easily handle yourself, such as loose floorboards, flaking paint, or basically anything that costs $100 or less to repair. Most sellers will usually refuse to address these issues. Focus instead on major concerns like structural damage or deterioration, building code violations, or serious safety risks revealed in the inspection report.
Since home inspectors don’t include price estimates for repairs in their inspection report, it’s a good idea to ask around and get your own quotes from contractors to see how much certain repairs or replacements will cost. If you’re thinking of negotiating a price reduction in lieu of the seller making repairs, you can share the contractors’ quotes with the seller to justify your request.
Try to seek concessions to go toward covering the cost of major repairs like a poorly functioning HVAC system, mold or asbestos remediation, foundation issues, and damage to the roof or chimney. In many cases, the seller will opt to reduce the sale price instead of completing the repairs. As the buyer, it’s in your best interest to negotiate for a repair credit to go toward having a contractor do the work instead. If the seller agrees to do the repairs, you risk them hiring a cheap contractor to do repairs at the lowest possible rate.
If you fail to negotiate terms for the seller to cover the cost of repairs, offer a repair credit, or lower their asking price, consider asking for a home warranty. A home warranty is a type of contract that covers the cost of repairing, replacing, or maintaining household appliances or systems for a set period.
Sometimes known as a residential service contract, a home warranty plan typically covers major appliances like the furnace, water heater, oven, dishwasher, washer and dryer, or refrigerator. Some home warranties also cover plumbing, electrical, and HVAC systems. Shop around for warranty companies who provide the type of coverage you’re looking for.
Some sellers list their home on the market “as-is,” meaning that they are selling the house in the condition it’s in—take it or leave it. Although this generally signifies that the seller isn’t interested in doing the repairs, don’t let it discourage you from negotiating for a lower house price, especially if a home inspection uncovers potential major issues. The seller may be willing to compromise depending on how eager they are to sell, and how interested you are in buying the property.
If you’re buying an older home and have big plans about turning it into your dream home someday, try not to disclose too much about all the renovations you plan to do — especially if you’re talking with the seller’s real estate agent. They may share this information with the seller who, in turn, might not agree to cover expensive repair costs since they know you’ll be renovating anyway.
If your negotiations are going nowhere with the seller and you’ve exhausted all options, be willing to accept that perhaps the home is not for you. Time is of the essence when it comes to finding and buying a home you’ll be happy to live in, so you can’t spend too much time negotiating with a seller who is unwilling to budge. Move on, and your perfect house may be just around the corner.
For real estate transactions in most states, it is up to the buyer to pay for a home inspector to conduct a home inspection. With the buyer footing the bill, it allows them to choose an inspector they trust to conduct the inspection and review the report themselves to note any major and minor issues.
The cost of a home inspection depends on a variety of factors such as its size, age, condition, and location. Larger homes with greater square footage typically costs more to inspect. The same goes for older homes which may have more potential issues to check such as structural deterioration due to age or the possibility of asbestos. On average, home inspections cost between $280 to $400.
If buyers have included a home inspection contingency in a contract, the seller typically has up to three business days to respond. The exact amount of time should be detailed in the contract. The seller can choose to agree to the buyer’s request for repairs, make a counter-offer in order to reach a compromise, or refuse their request.
