How to Negotiate a Home Inspection (Buyer)
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- Опубліковано 8 чер 2024
- Home inspections are an important part of the home buying process. In this video, I share some tips for negotiating repairs before closing or seller concessions after a home inspection.
Thinking about buying or selling a home in Seattle soon? Please don't hesitate to reach out! People like you regularly contact me about their real estate goals after discovering me on UA-cam. I'd love to bring value to your situation too.
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Other links you might be interested in:
How to Negotiate Closing Costs When Buying a House - • How to Negotiate Closi...
How to Handle a Low Appraisal as a Buyer - • How to Handle a Low Ap...
6 Mistakes Home Buyers Make (And How to Avoid Them!) - • 6 Mistakes Home Buyers...
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Very useful. We just got the inspection today. We are focusing on the electrical wiring and slab. Appreciate you vid and help.
Good luck!
Not to be derisive, but realtors in my opinion, fail the seller by not recommending an inspection before listing. Too many sellers look at comps and say their house must be worth the comps without knowing that there my be significant work needed just to get financing approved.
Also, on credits to buyer, there can be limitations on how much credit a buyer may receive at closing (VA loans are 4% as I recently learned).
I'd agree that pre-inspections are generally a good idea for sellers
After inspecting in Seattle for 40 years it is important to remember the types of defects the inspector will discover. Material defects, work order items required by the bank, health and safety issues such as mold, and also insurance binder issues from the insurance carrier such as knob and tube wiring.
Appreciate the perspective!
Zach - great helpful video, thank you,
you're welcome, happy to help
VERY HELPFUL!!! Thank you!!!
You're welcome!
Spider-Man coming through with the knowledge. Great video, thanks man.
Glad it was helpful!
In today’s market your lucky to get house if you ask for a home inspection. So many people are forgoing the inspection to make a more competitive offer.
That is true. Buyers in some markets, like mine in Seattle, are electing to do an inspection prior to making their offer or skipping the inspection altogether. This video doesn’t apply in that situation because there is no way to negotiate inspection items.
@@McDonaldResidential We’ve practically given up getting anything this year it’s so bad (Lancaster area). Only way your getting a house is if you wave all contingencies. Had an offer rejected on a house with a septic system and the accepted offer was lower and had no septic inspection.
@@JT-zy2ft it’s a thought market for buyers right now. Sellers do generally lean towards no-contingencies over a slightly higher price.
As a seller I'd never agree to allow an inspection prior to offer.
The liability isn't worth it.
Great video!
Thanks!
Thank you!
You’re welcome. I hope it was helpful!
Excellent video. Going thru this exact situation as I type this. And, in our case, it's compounded by the home having multiple offers on it...with buyers in line waiting with the hopes of our purchase being dropped so the next can take it. Also, it's listed about $40-60,000.00 under market for the small area it's located having a strong Historical Significance. The very real possibility is the seller having a "Take it or leave it, I have many others waiting" stance.
The positives on this being we have been in the rehab field for decades, & can perform 90% of what's needed. This will be our home and as such, we can do one room at a time as we live there.
However, having reviewed the home inspection performed 2 days ago, very high levels of Radon is an entirely different issue. We are requesting costs for mitigating this dangerous situation at today's sit down with our Buying Agent.
Thanks for sharing your story
The good news is that the other buyers should see that the house has high levels of radon. The sellers will have the same issue with other buyers if they realize how dangerous radon is
@@isaacsmith9981 we ended up going in at 5grand over asking price and getting the seller to split points along with having a Radon company install the needed mitigating equipment. Levels are that of nearly nothing, which is 10 times below acceptable . We've been in the house for several months.
With the current economic conditions for fires this video is gold right now! We are doing inspections on a four Plex and it has a flat roof needing replacement but with some of the new systems that are available are “circling around $60,000 so we are going to be figuring out what the max we can ask for in concessions is and then after closing there are some new coding systems we can use that are actually a bit cheaper.
Sounds like a good plan
That's assuming the seller is willing to make any concessions or negotiations. You may just demand your way right out of the sale.
Great video
Thanks
Thanks, Zach, for your wealth of knowledge. I'm currently experiencing this. Post-inspection, there are six needed repairs. However, two are potential deal-breakers. There's a plumbing pressure regulator issue, and the showers in the different bathrooms can't adequately run simultaneously. As well the HVAC issue is the house doesn't get cold enough. Now I accepted to overlook the compromised deck, worn carpet at the basement landing. However, the house is 80, a stable home. So I don't know how to approach this without expressing that I shouldn't have to pay anything for those issues. Please help.
Hi Anissha. Glad this video was helpful for you. Ultimately, you need to decide what repairs you are willing to take on and what repairs you are not willing to take on. This is different for each person. I'd talk this through with your agent and get their input too. The seller made zero repairs when we purchased our current house. We asked for some repairs/concessions, but they were unwilling to make any. We decided to purchase the home anyway.
@@McDonaldResidential Thanks, Zach, for the advice. As you know, this is a nerve-wracking time. Ok, I can tell my sellers aren't accommodating about things most repairs either. Yet, I'll just pray they're diplomatic about the systems stuff. Thanks for the great videos too.
@@McDonaldResidential Thanks, Zach, I did just that. My agent and several inspectors pulled some shady business the last week of closing by patching things before our scheduled appointment, and the repair blew out days after purchase. However, that created distrust for even the inspector I hired. So, I spent thousands of dollars and am prioritizing and budgeting. Yet, quite expensive, my mortgage rate Is 2.8, and I live in an ideal subdivision, so I'll be alright. The only con is my excellent credit is taking a beating. But in time, it too will be fine.
It is important to know what is reasonable to expect. A defective water heater that leaks, raw wood with defective siding, a moss covered roof that makes the shingles undependable are all reasonable to expect some concessions on, as long as there are no back up offers.
Thanks for sharing some of your insights and experience!
even if there are back up offers, as a seller you'd have to imagine that person will want the same concession, if not more.
Not necessarily. Some buyers are able to do much of the work themselves and are more interested in closing the deal.
As a seller never be afraid to refuse concessions. Some agents/ buyers will ask for the Moon on a silver platter never actually expecting the seller to agree to their ridiculous demands.
This is where the pre-listing inspection is invaluable. The seller knows going in exactly the condition of the property and has if not corrected any deficiency has figured the repair cost into the asking price.
As a home inspector for over 20 years I would tell the seller (in regards to the water heater), he is going to have to fix it for whoever buys the house so he might as well fix it now so THIS deal goes through.
Hey Zach can you touch on what due diligence down payment means in terms of being able to negotiate the issues found in the inspection?
If costly issues are found in the inspection and the seller refuses to fix anything, will the buyer lose the due diligence down payment if they walk away from the deal?
In Washington State, earnest money is generally protected by the inspection contingency. The buyer would have the opportunity to negotiate with the seller or back out during this time period and retain their earnest money deposit in most situations.
Can you get your earnest money deposit after negotiating extensions of date??? And you back out....
Typically the buyer does not get the earnest money back unless there is a contingency protecting it and allowing the buyer to back out
Super helpful! I appreciate this great video! I learned something new - if that's truly the final offer I have, it doesn't hurt to repeat it as a response to a counter offer, in case seller might reconsider it the second time. Thanks again!!
You're welcome, glad it was helpful! An agent shared that tip with me when I was just getting started in the business in 2014.
Lol It never hurts to ask. Personally this kind of maneuver irritates the heck out of me. No means No. It doesn't mean keep flooding me with unnecessary offers I've already rejected.
Just completely an inspection. We found termite damage in a few spots on both first and second floor. Hiw serious is termite issue usually? How much can a buyer negotiate the price down? Do most buyers walk away after they found out about the termite damage? Shall I send the inspection report to the seller's attorney?
I would speak with your agent on this question. We don't deal with termites much in Western Washington. I typically get bids for repair if I want to negotiate an inspection item like this so we have real dollar numbers to discuss.
What would you do in this situation.. just had inspection on my hopefully new home! It was advertised as a 4 bed 3 bath home. After the inspection we learned one of the bedrooms is not up to code, so this home is now a 3 bed 3 bath. I assume this is going to affect the appraisal as well (which is next week).
What do you mean by not up to code?
Needs a closet and a 2nd egress and it’s a bedroom.
Can you negotiate the binding contract price after inspection ?
Yes if there's a contingency
Yes, if you have an inspection contingency...as Darius already answered
Yes. Although your agent will probably advise asking for a different type of concession. It's important to remember that the agent is paid by a percentage of the sale price.
These concessions for closing costs etc don't affect their paycheck. They only affect the seller who is already paying your agent.
.
It's always the better move for the seller to lower the sales price as opposed to paying closing costs or other concessions. It lowers the amount of the cost of the commissions they pay.
Although few agents will point this out to their clients.
What does it need if my cash to close is in the negative.
Do you mean to say that your cash to close is negative? If I'm understanding this correctly, that would mean that you would receive a refund at closing. Sometimes my clients putting little to no money down do receive part of their earnest money back at closing if there is leftover money.
The title search for the buyer is being done by the seller's lawfirn where she works as a paralegal. In that case, is it too crazy to ask the seller to pay all buyers closing cost?
Hi Javier, I'm not sure how things work in your state. However, in Washington State, it all comes down to what you and your agent negotiate with the other party.
Lol You can ask for anything. Just don't be surprised if your seller says No.
Personally I never pay the buyer's closing costs. The seller is already paying 3% of the sales price to your agent to work against the seller's best interests. Pushing for more this late in the game is a good way to anger the seller enough to tell you No, take it or leave it. And in the current market they'll probably have 3 other offers lined up to step in if you step out.
Hey Zach can I still request for a seller credit after the inspection period is over?
Depends on what your lender will allow and what your agent can negotiate with the seller. Typically it's hard to negotiate further after the inspection period because you have little-to-no leverage left in the negotiation.
Is it a good idea for the buy’s agent to get involve with inspection negotiations ? Or just let the buy’s lawyer handle it ?
So we made a formal response, on big ticket items
Seller counter offered, on day 10 do we as a buyer still have one more opportunity to purpose or request or stand strong and ask again for the big ticket items? Even after day 10? Also in WA
@@colinnakano2127 hi Colin, typically the initial inspection period on the WA contracts is 10 days, but the remaining response timelines are much shorter. Hoping your agent was able to provide some good insight here. Did you end up getting the repairs you requested?
@@Soso0408 agents typically handle these negotiations in WA state. I’m sure it’s different elsewhere.
What if your chimney inspector discovers a big deal and the seller says he’s contractor says it’s not a big deal and he will fix it. I don’t wanna move forward. My realtor submitted a offer release.
That sounds like the right move in your situation. Sometimes it's best not to move forward with a purchase.
What about a 60 amp house that needs to be a 100 amp?
What are you wanting negotiate in this situation?
@@McDonaldResidential I'd imagine changing from 60 to 100, since 100 is pretty much the minimum, even on older homes. Probably would cost 2-4k
I have an attorney say to me once on a slow drain that oh we're not going to provide a credit because it's still functional I said okay you want to buy this tennis racket for me it's missing Street strings but it's still functional they wanted and pay the credit
That's a good comeback
Inspection is always a smart way to protect the buyer. What if the seller is retired and on a fixed income and can not afford repairs? Why not simply negotiate a reduced price so the seller can use the savings for the repairs?
Yes, agreed that home inspectors are important for buyers. Reducing the sales price is a good option, but it puts little cash in the pocket of a buyer with financing. That's why a credit from the seller is typically preferred by most buyers instead of a price reduction. It's the same difference for the seller.
@@McDonaldResidential Not clear. A credit also would not put cash in the pocket of the buyer needed for repairs.
@@RetrieverTrainingAlone if a buyer receives a $5k credit from the seller at closing, then they would be paying $5k less out of pocket at closing. So, they would have $5k more in their pocket than they otherwise would have. It’s the equivalent of a seller giving the buyer back $5k.
Seller would also be paying the agents based on the higher sales price. So it's to their benefit to advise concessions on closing costs as opposed to lowering the sales price.
Be aware as a seller. This can result in thousands of dollars difference in the agents commissions you're paying.
Who pays for the second home inspection
Generally, the seller pays for a re-appraisal in my market (seattle/bellevue metro)
Glad I don't live there! Buyers pay for all inspections and reinspection here and every state I've dealt with real estate in (5).
Why on earth would the seller pay for buyer's inspection when they're already paying 3% of the sales price for buyers agent to work against their best interests? Talk about adding insult to injury 😅
Lol. No disrespect. But any real estate agent that doesn't see rotting structures on a property, may not be the best equipped to represent you in the buying process.
Rule #1 of Real Estate. Never fall in love with the house. Fall in love with the deal.
(Buyer side ) Who does this negotiating, attorney or agent ?
In WA State, agents negotiate on behalf of clients during the inspection period. It may be different depending on what state you are in.
I had the same question
I would never trust a seller with major repairs. They will do it as cheap as possible.
I personally prefer to do my own repairs, too. I'd rather a $ credit or price reduction
I dropped my price 7k appraisal came back 10k over price, buyer got 17k benefit already and I aint fixing or giving any credits. Will just list 17k higher As Is. Have a 2.9% mortgage and already living elsewhere for free
😂😂😂😂
You need to get a better agent. That's a deal more in favor of the buyer than the seller. And you're paying both their paychecks.
How did this work out for you? Did the buyer end up going through with the sell?