If you think the negotiations are over once your new home goes into escrow, think again. After the home inspection report and seller disclosures, you will have a chance to confront the seller with any hidden defects or needed repairs that were unknown or undisclosed when the purchase contract was signed. With a home inspection contingency in place, you can tell the seller, “if you agree to these additional terms and conditions, which are a direct result of the inspection or other discovery, we will waive the option to back out and we will proceed to closing.”
It is intended to be a time to conduct all the necessary inspections and pore over the disclosure documents, looking for major problems that could not have been anticipated based on the visible condition and age of the home; specifically, expensive upgrades that will impact the buyer financially for years to come. It is not the time to present the seller with a laundry-list of minor repairs.
You should never be unreasonable in your requests for repairs, but don’t hesitate to point out genuine defects, and don’t be intimidated by the seller in a seller’s market. Chances are, if the seller decides not to sell his home to you due to your many requests, the next buyer will have similar requests. With a home inspection contingency option, the buyers can either ask the seller to take care of the repairs, request a monetary credit toward closing costs, proceed with the sale as is, or walk away from the deal completely.
We suggest the monetary credit at closing, especially if you have paperwork or estimates related to the defects. The seller has little interest in sprucing up the place the same way the buyer does. Let’s take a typical example. A home inspection turns up evidence that the HVAC system is on its last legs. While buyers should always accept that an older home often comes with older appliances and systems, the seller in our example assured the buyer initially that the HVAC system had been upgraded “just a few years ago,” and indeed appeared new-ish. However, an inspector noted the unit was too small for the BTUs needed, and was quickly burning itself out. Armed with two or three written estimates for replacing the entire HVAC unit, you can negotiate cash credits (or partial refunds) based on your findings. If the seller agrees to your credit requests, or replaces the HVAC system with an acceptable model, you will be obligated to go through with the home purchase.
Negotiating for repairs can be a delicate process, and Open Listings will help you with home inspections and requests for repairs. Be reasonable in your demands, and always weigh the consequences of your requests against how badly you want the property.