The real estate market is a stressful place for buyers and sellers alike. Every step of the process is wrought with the fear that someone will back out, thereby shattering the other party’s dreams. And that stress usually reaches an all-time high during home inspections.
It is very common for negotiations to continue into escrow, which leaves many sellers uneasy over how to successfully navigate final compromises. Though sometimes a great challenge, we have some tips on how to negotiate after a home inspection:
HOME INSPECTION: WHAT IT IS AND WHAT IT IS NOT
A home inspection is performed in order to recommend improvements and repairs for structural integrity and safety standards. It is not, however, a laundry list of must-have fixes around the home. It is especially important for buyers to understand this delineation, as negotiations for repairs should never turn into a long list of small and meaningless.
The biggest mistake a buyer can make is to expect their new home to be delivered to them at the standard of new construction.
SELLERS: BE REAL AND BE HONEST
If you are getting ready to sell your home, do the smart thing and do your own, preemptive inspection. As much is as within your budget, try to anticipate the defects that will surface during the home inspection. If you can fix it yourself, then take care of it.
This will eliminate some of the stress during negotiations and lessen the amount of back and forth between you and the buyer.
BUYERS: BE FAIR
Home inspections are about uncovering major issues that could dismantle the buying process and potentially derail the transaction. But that is not the cause to ignite every little detail on the inspection report. Negotiations are simply about being reasonable.
For sellers, this may mean completing most of the repairs that come through during negotiations. For buyers, this means thinking logically about the repairs and how vital they are to the overall integrity of the home. Asking for lots of small repairs, like scratches on walls or tiles, could be seen as petty and may be discounted by the seller.
CREDIT VS REPAIR
It is truly in the best interest of both the buyer and the seller to default to a credit than repairs. This is not always the case, but for big repairs, a credit can mean the difference between happy parties and a delayed closing date. Because buyers tend to be picky about the repairs made to their new home, it’s best for the seller to put the money for said fixes in escrow.
This will leave the buyer with the means to handle their own repairs, thus leaving the buyer out of any possible scuffles that arise because of workmanship. Of course, there are instances when it is more cost-effective for the buyer to complete the repairs themselves. If this is the case, both parties need to be brutally honest about what the other can expect so that there are no surprises.
TEAMWORK MAKES THE DREAM WORK
The best negotiations come from reasonable parties. It’s about creating a community. If the buyer and seller feel comfortable speaking candidly with one another, then negotiations after home inspection will likely go more smoothly. It’s highly encouraged that both parties consult the advice and professional know-how of their realtor.
In many cases, realtors can provide the necessary guidance to ensure both parties walk away happy.
PRO TIP: KEEP YOUR COMMENTS TO YOURSELF
If you’re a buyer, keep your future renovation plans to yourself. It is extremely likely that your dream to gut and remodel the entire living room will get back to the seller. If this happens, your requested repairs (for said room) could be completely discounted. Just keep those details to yourself.
For more buying and selling tips, check out our resources section here!