Here are a few tips to help you negotiate for repairs as a homebuyer.
Did you know that 95% or more real estate transactions have a physical inspection contingency? That means the buyer has the right during the escrow period to hire an inspector to inspect the home for any flaws before they move in. The different inspections they conduct may include a general home inspection, a wood-destroying pest and organisms inspection, and specialist follow-up inspections resulting from anything that came out of the general inspection. Following these inspections, the buyer has the right to request repairs from the seller, a credit in lieu of repairs being completed at the close of escrow, or a reduction of the purchase price.
So how do you negotiate for repairs without it becoming an issue? Here’s how negotiations often tend to go: The buyer completes their inspections, and after getting the reports back, they compile a list of all the defects spotted and tell the seller that they need to either reduce the purchase price or give them a credit based on all the items found. The seller, having lived in or rented out the home for a number of years, often says that they’ve never had a problem with any of the items pointed out and reject the request.
That’s not really an effective way to negotiate repairs. Here are a couple of tips to keep in mind as a buyer:
1. Only request repairs for items that concern your health and safety. Ask yourself whether any other buyer would request the repairs prior to moving in if they were under contract. If the answer is yes, you can probably feel pretty assured in asking for that repair.
2. Before you send in a request for repairs, get bids on the renovations involved. When requesting repairs, if you pull a random number out of thin air, you may or may not get a positive response from the seller. But if you back up that number with an actual quote from a contractor, you’ll probably get a much better result.
3. Accompany any repair request with a contingency removal form. If you give your request to the seller with a form that says you’ll remove the inspection contingencies from your offer and commit to moving forward, the seller will be more likely to acquiesce to your requests.
4. It’s always courteous to finish your inspections as quickly as possible. Have your inspections scheduled at the beginning of escrow, and if you make any requests, don’t wait until the end of the inspection period. A seller may like you’re doing so intentionally to lengthen the process and obtain the upper hand in your negotiations.
If you have any questions about negotiating for repairs, buying a home, or real estate in general, don’t hesitate to reach out to us. We’d love to hear from you.