Home Inspection Negotiation?

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What is the best way to negotiate the home inspection aspect of the purchase. If your inspector estimates 10k in damages, do you ask for it to be fixed, asked for part of the money off the purchase price, ask for closing costs, ask for a home warranty. Any experiences that others can share?

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Buyer can ask for anything, seller can refuse, buyer can withdraw from agreement based on inspection contingency.

If you ... (more)

rufflesinc (May. 13, 2013 @ 12:59p) |

Had a similar situation recently (as seller). The inspector noted that the HVAC was old and would need to be replaced. ... (more)

dcwilbur (May. 13, 2013 @ 2:04p) |

Second to inspectors being useless.
If you inspector says he will inspect only visible areas (which is always in their di... (more)

BayAreaGuy (May. 13, 2013 @ 3:55p) |

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We have always asked for the cash off of price or closing costs, etc. If you ask them to fix it, you will risk them hiring the cheapest person to do it (i.e. handyman, unlicensed, etc) and this could be even worse than it was before the inspection.

on a side, inspectors are typically dip shits,

tennis8363 said:   We have always asked for the cash off of price or closing costs, etc. If you ask them to fix it, you will risk them hiring the cheapest person to do it (i.e. handyman, unlicensed, etc) and this could be even worse than it was before the inspection.

Pretty much this. Had a fewer minor issues on my current house when purchased and let the seller hire somebody to fix them. Some were done ok but a couple were done poorly (I should have paid more attention to the work) and had to be redone later. In the future I'll ask for $ and do myself or hire who I want to do it. That said if your local market is competitive you may or may not be able to extract cash vs. repairs from seller. It seems to me that most realtors have a line on the cheapest contractors locally and get them to do any pre-sale/post-sale work.

skh12 said:   on a side, inspectors are typically dip shits,

That is mostly because folks hire who their realtor recommends (this inspector understands that future work from realtor depends on them moving the sale along) rather than do their due diligence and hiring somebody who has less of a conflict of interest. My inspectors, hired outside of my realtor have been good.

skh12 said:   on a side, inspectors are typically dip shits,

My limited experience, home inspectors are unqualified a-holes that try to find something to justify their "Inspection" fee. I'm seen many inspection,for family members where I found a rotten out electrical panels, aluminum wiring, missing bearing beams etc, etc that were missed. Then only asked why they didn't just ask me . . . since I have no skin in the game. No fee, no sales commission . . . just no certifiable report (computer generated). Question you need to ask if the inspector found everything and at most, expect the seller to meet you half way. If you want perfect, good luck or buy new with a warranty.

Red55 said:   skh12 said:   on a side, inspectors are typically dip shits,

My.... If you want perfect, good luck or buy new with a warranty.


Warranty companies are notorious scams...use all sorts of excuses to not pay for problems. A total waste of $$. Google this issue and see what I mean. The realtor gets a kick-back for selling these POS.

So it seems the consensus is to ask for the $$$, and hire someone to do the repairs. If so do I ask for it off the sales price or toward the settlement costs?

One thing to consider is whether your contract and/or applicable state laws are written such that they will permit you to renegotiate everything. As a first time homebuyer in NY, I had assumed I would be able to essentially renegotiate the contract based on the results of the inspection. However, there was some limitation regarding not being able to consider any finding that would cost less than $1500 to fix. I was pretty annoyed when I figured that one out. So you could find 20 things that each cost $1499 to fix, and you'd be SOL. Just something to watch for.

It depends on if you are financing or paying cash, and what comes up during the inspection. Most lenders won't fund a property that needs a major repair(major can be anything from an actual major issue like a foundation crack to something as small as an outlet not working).

If the lender requires the repairs to be made prior to closing, you might want to pay an extra couple of hundred to have a follow up inspection performed to ensure the work was done correctly. Hiring the same inspector to re-inspect the couple of items repaired shouldn't cost more than a hundred or two since they're not performing a full inspection.

I always try to get the repair cost reduced from the purchase price since I can use my own crew at about 1/2 of retail cost. If repairs are required prior to closing due to the lender, I recommend my contractors to the seller so I know the work is done correctly.

welookgoodcom said:   So it seems the consensus is to ask for the $$$, and hire someone to do the repairs. If so do I ask for it off the sales price or toward the settlement costs?If you're getting a mortgage, the latter might not work with today's rules.

I just closed on a house where I made the seller replace the meter from where the powerline hits the roof to where the big wire enters the house. The agreement was that they would have a licensed electrician pull permits. I then called the city to verify it passed inspection.

So for big ticket items like this, you can make them fix it using a licensed contractor with city inspection. This also makes the seller take the risk of the city finding additional violations.

For lesser stuff that might not require city inspection, you could still require a licensed plumber or HVAC, or require them to use a contractor from a list they give you. Doesn't hurt to ask.

Look at it financially. Let's say you're putting 20% down and the repairs cost $10k. You ask them to reduce the price by $10k. But that only reduces your down payment by $2k, and you then spend $10k fixing it yourself.

OR, you have them fix it. Let's say the market is hot like it is right now and they balk unless you add $10k to the price. The downpayment only increases by $2k, compared to $8k above. Plus, you still make it contingent on appraisal.

Edit: this particular property appraised for about 9k above the purchase price. In other words, I could have had the seller add a bunch of upgrades and amortize it over 30 years at 4%. But this was my first go at this strategy so I ended up paying $1k for replacing the garage door instead of having seller do it.

tennis8363 said:   We have always asked for the cash off of price or closing costs, etc. If you ask them to fix it, you will risk them hiring the cheapest person to do it (i.e. handyman, unlicensed, etc) and this could be even worse than it was before the inspection.

As a seller this was done to me. I told them to take a hike i would have everything fixed. It was mostly minor things but still some stuff your just throwing money out a window to hire a pro to do it.

Never heard a peep from the buyer and they accepted the proposition.

OP, in real life, it depends. It depends on how badly the seller wants to sell the house and how badly you like this house. I've been on both sides of this. The question you should ask yourself: are you willing to walk away if the seller refuses to pay for repairs?

sloppy1 said:   
Warranty companies are notorious scams...use all sorts of excuses to not pay for problems. A total waste of $$. Google this issue and see what I mean. The realtor gets a kick-back for selling these POS.


He said buy NEW with a warranty. New home constructions are normally warrantied by the builder, not a home warranty company. As long as it is a reputable builder issues will be fixed without problem.

sloppy1 said:   Red55 said:   skh12 said:   on a side, inspectors are typically dip shits,

My.... If you want perfect, good luck or buy new with a warranty.


Warranty companies are notorious scams...use all sorts of excuses to not pay for problems. A total waste of $$. Google this issue and see what I mean. The realtor gets a kick-back for selling these POS.[/Q

Agreed. If your house comes with one you may be able to cancel it and get them to send you a check - if so, do it. Otherwise if you try to use the warranty, you'll be faced with incompetent techs who want their trip charge upfront, and will then word your issue to the warranty company in such a way that the claim will be denied and the tech will try to sell you the repair themselves.

This is what I've read and it lines up with my experience in the break-fix business.

welookgoodcom said:   So it seems the consensus is to ask for the $$$, and hire someone to do the repairs. If so do I ask for it off the sales price or toward the settlement costs?I'm selling a property right now on which the buyer is not able to get insurance due to a couple of issues, so I am having the repairs done. Essentially, we wouldn't be able to close with the house in its present state. And yes, I'm using the cheapest contractor.

I don't think it is as simple as always get the money and have it fixed yourself. Sure if you pay for the repair you can choose a good contractor and get any warranty in your name. Then again if you get $X for simple fixes and they find a much bigger problem you are on the hook for the remainder. I think it realy depends on what is being fixed.

For example, if a new water heater is required you can probably get a good estimate of that cost. Then again if the repair is to fix a few roof shingles that could turn into a new roof including rotted sheating.

Also, the general practice if you agree to accept money to fix it yourself is to leave the house sales price the same. You then get a credit at closing. Since realtors get a percentage of the sales price, of course they reccommend this approach.

My bottom line advice, FWIW, is to consider accepting money/credit to fix things where you clearly know the scope of the work. If there is a chance a bigger problem can be hiding below the surface make the seller have it fixed by a licensed contractor with any warranty in your name.

It just depends on the situation and like you said in your subject...the key word is negotiation. If the issue is something that would probably prevent anyone from buying the home, like a fairly major issue, I would definitely push for the seller to either fix it or take that amount off the sale price. Now that they know about the issues they'll have to disclose them to other buyers so they'll probably just want to get it taken care of and corrected ASAP.

If it is smaller issues, just go through the list and see what you can take care of yourself and how much it will cost and ask them to reduce the sale price by X amount for these items (give them an itemized list). They'll counteroffer and probably just go ahead adn fix a few of the things and then give you X amount via lower sale price to do it yourself.

I've had experiences with very good inspectors and very bad inspectors. Once you find a good one, they are a very good resource to have. Ask around if you are unsure of your inspector.

bugged said:   
For example, if a new water heater is required you can probably get a good estimate of that cost.


That brings up something I'd been wondering about.
What do you do if the inspector says "water heater is too old, so it should be replaced"?
As a seller my first thought would be "so what, it works fine".

taxmantoo said:   bugged said:   
For example, if a new water heater is required you can probably get a good estimate of that cost.


That brings up something I'd been wondering about.
What do you do if the inspector says "water heater is too old, so it should be replaced"?
As a seller my first thought would be "so what, it works fine".
Buyer can ask for anything, seller can refuse, buyer can withdraw from agreement based on inspection contingency.

If you have a gas water heater, in addition to a water leak, you also have to deal with the possibility of gas leaks.

taxmantoo said:   That brings up something I'd been wondering about.
What do you do if the inspector says "water heater is too old, so it should be replaced"?
As a seller my first thought would be "so what, it works fine".
Had a similar situation recently (as seller). The inspector noted that the HVAC was old and would need to be replaced. My response, "It was old when you made the offer on the house. If the house had new HVAC, it would have been a more expensive house." That issue quickly went away.

Second to inspectors being useless.
If you inspector says he will inspect only visible areas (which is always in their disclaimer) - you are wasting money.



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