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Educating Your Clients on Home Inspection Negotiations

Posted by Caitlin Smart on Aug 8, 2018 11:13:01 AM
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Once an offer is accepted, arguably the most frustrating part moving forward for both clients and agents alike is the inspection negotiation process. Our buyers are spending a lot of money on the purchase of their home and naturally want things to be move-in ready with no additional expenses on their end. Our sellers, on the other hand, are ready to move on and invest their money into their NEXT home and have little desire to hear about cosmetic requests that may come off offensive. As agents, it's our job to prepare our clients for what to expect out of a home inspection and to continue to educate your clients throughout the entire process of a transaction, including best practices for inspection negotiations. 

 

"WHAT'S REASONABLE TO ASK FOR?"- BUYER BOB 

 

There really is not a standard for what is reasonable and what isn’t, however, below you will find a bit of guidance on how to help educate your clients on this topic. For those that don’t buy and sell homes every day, the purpose of a home inspection is to find out if there are severe structural or mechanical defects.

The issues should be large enough that they could have a significant impact on the use and enjoyment of the home now and in the future. Unfortunately, on occasion, some buyers can lose sight of the purpose of a home inspection and wish to request everything listed in the report. 

When advising a seller client on what they should agree to fix and what they shouldn’t, there is one line of thinking when determining what’s reasonable.

If the sale fell apart and the home went back on the market would it be sensible to assume the next buyer to come along would also have the same request? Would the problem with the home stop the customer from getting financing?

1. COSMETIC ISSUES

Your clients probably noticed these during their initial walkthrough and still decided to make an offer. In a seller's market, advise your clients to look past these little annoyances and focus on the findings that affect the functionality of the home. Remind them that doing the cosmetic fixes themselves might be the better option to allow them to pick colors and upgrades themselves rather than relying on the seller's solution to the problem. Plus, sellers sometimes don't have the money to fix extra cosmetic repairs which can make a deal fall through and moving on to another buyer. 

A home inspection should not be to create a punch list that itemizes every minor defect with the home you expect the seller to fix. Electrical, plumbing, roof, HVAC – these are repairs that you can reasonably expect a seller to take care of under most circumstances, as long as the problems are significant enough to impact the use of the house negatively. But there are some repairs that sellers will push back on in many cases, repairs that you should avoid asking for if they want to make it through to closing. 

2. A WINDOW WITH A FAILED SEAL 

Failed window seals are quite common in homes. Glass that has become fogged is almost always visible when viewing a home unless you are not paying attention. This falls into the category of something you should be paying cognizant of when viewing properties. Most home inspectors will tell you that a failed window seal is purely cosmetic. The insulating value loss is extremely minimal. 

If there are a significant number of windows that need replacement, discuss it and account for the replacements in your offer and explain the reason for the adjustment to the listing agent. Asking the sellers to fix it directly in order to move forward might make your offer less appealing than others.

3. LOOSE FIXTURES, RAILINGS, AND SIMILAR ISSUES

A loose doorknob, light fixture or railing on a deck or stairwell may be annoying, or even potentially unsafe, but these problems are also often fixable with basic hand tools and a little effort. If you can’t tighten the screws yourself – such as if they are stripped out, or if the material involved is old and worn out – you can hire a contractor to fix the problem for a reasonable price.

Obviously, if there are vast areas of rot or decay or major safety concerns, the inspector with say so, and you can demand a repair. But if the issue is minor, avoid stressing about it for the moment. 

What Inspection Items Should Be Fixed?

As mentioned previously, the issues a buyer should focus on asking a seller to repair or replace are significant structural, mechanical, or environmental defects.

These are the substantial home inspection problems. It is reasonable to assume that any buyer would want these items fixed if discovered after a home inspection has taken place. Some of the major home inspection items worth addressing are:

  • Termites or other wood destroying insects.
  • Wildlife infestation like bats or squirrels in the attic.
  • Major drainage or on going water problems.
  • Mold problems.
  • Elevated Radon levels above EPA suggested levels.
  • Major electrical defects that cause safety issues.
  • Significant plumbing problems that interfere with the use of the home.
  • Lead paint. It should be noted that it is a federal requirement for sellers to disclose the known presence of lead paint in a property.
  • Well water problems, such as a lack of pressure or volume of water.
  • Major structural issues such as a leaking roof or substandard building violations.

The above items are a condensed list of possible issues worth asking an Idaho seller to address. There certainly could be others but these are without question reasonable repair requests that any real estate buyer would have.

Topics: Relationship, Client, Agent, Insider

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