Renegotiating After A Bad Home Inspection

So, you think you want to renegotiate? This is one time when your real estate agent will really earn that commission! You don't want to "confront" the owner; after all, the owner has a vested interest in keeping the price where it is, and likely will take the inspection results "personally". So, you want to keep your agent (and the owner's agent) on the hot seat for this process.

Make sure your agent knows that there are problems with the inspection report. Provide only the relevant portions of the report -- not the whole thing! After all, if the bulk of the report is favorable, the owner may try to use this as a reason to keep the price as it is. As well as the relevent sections of the report, you should provide a straightforward, specific, non-judgmental, and non-threatening statement of your request for a "remedy" to the noted problems, and any back-up materials you have been able to obtain such as contractor's quotes. Above all, keep calm and reasonable, and take your real estate agent's advice. If your agent suggests that you might be reacting harshly to a relatively small problem, you might want to consider backing down. After all, your agent sees homes and sales transactions all the time, and they should be able to offer you some good perspective.

And what if you decide to proceed?

You can ask the sellers to correct the situation prior to closing. This removes uncertainty about costs and avoids the hassle of renegotiating the price of the home. If the problems turn out to be larger than anticipated, it is the seller's problem. The disadvantage is that you will lose all control over the fix and you could end up with substandard work. (After all, the owner is leaving the home.)

You can ask for a reduction in the purchase price. Sellers may or may not like this approach although it will save them some real estate commission fees and some money on other costs which are fixed based on the sale price of the home. It may not work in your favor either, as any such adjustment has the effect of reducing the size of the mortgage rather than freeing up cash to get the problem fixed.

You can try to get cash back at closing. This is usually the best option for the buyer as it is real money and can be applied in total to correcting the problem or problems. Be prepared that it will be the one option that the seller will be most against!


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