Negotiating After a Home Inspection to Get the Deal You Want

For Homeowners and Homebuyers

Inspection Support Network

What happens after a home inspection?

After you have a home inspection done, the person you hired will send a detailed home inspection report to you. This is an important tool for a homebuyer as it tells you the condition of the home and flags major issues.

Following a home inspection, buyers have a few options.

Continue the sale at your original offer price
Negotiate for the seller to make repairs
Ask for a lower price
Skip negotiations and make a counter-offer
Walk away if the asking price is too high

Both the buyer and seller have power during this step, as neither one has to accept the other’s terms. One party may have more power than the other depending on the condition of the home. This article covers how you can negotiate after a home inspection and when to walk away from a property.

Negotiating after a home inspection

Buyers and their realtors begin negotiations once a home inspection report is ready.

Still, a few risks come with negotiating repairs after a home inspection. The seller can deny your requests without justification and move on to more willing buyers. This is typical in a seller’s market when a property can have many offers, even if it has issues.

A real estate agent can tell you about reasonable requests after the home inspection and help to identify them.

Tips for negotiating after a home inspection

Before you begin negotiating, don’t forget to do your homework. Get a detailed overview of the property and consider multiple outcomes of the process.

Go over the home inspection report with your realtor

Following a home inspection, you will get a report with a summary of the condition of a house. If a home inspection report outlines any issues, you can use them to renegotiate the price of a home.

A real estate agent can help you identify the issues that can be fixed and the ones that you can use to renegotiate the price of a property.

Aside from considering your home inspection report findings, pay attention to the real estate market. A buyer’s market is more favorable for negotiations, and you might be able to lower the price if a seller is willing to go the extra mile to sell their property.

Focus on critical repairs

A home inspection report outlines the most critical issues in a property, like safety hazards and property defects. Safety hazards and problems that need immediate attention can be used to negotiate the price, but they also can be costly. You will likely spend the money you save through your negotiation on these repairs.

Before starting the negotiation, call local repair services to price out these repairs. The price shouldn’t exceed the amount of discount you can negotiate with the seller.

To help you narrow down your options, break down all the potential maintenance into several categories:

Major safety issues that need repair
Less critical issues that don’t need immediate repairs
Minor repairs that have no significant impact on the value of a property

After you find out what requires repair from a home inspection report, take a hard look at your list. Not all items on the list are worth negotiating, like lighting fixtures or cabinets in a funky color that you can repaint. Decide what you can live with vs. what has to be changed.

Use a home inspection report to negotiate

A home inspection is your best tool for negotiating a home sale. After going through the home inspection report with your realtor, bring up the concerns to a home seller.

You can ask the seller to make repairs or do maintenance before the sale closes. You can also negotiate a lower price instead. Your realtor will help you make this decision.

Pay attention to the “as is” clause which means home sellers are not interested in making any repairs. This means you shouldn’t ask for repairs but you can still try to negotiate for a lower price.

Ask for a home warranty

A home warranty is a policy that covers appliances and home systems for a specific time. You can ask the seller to buy one for you if they are unwilling to negotiate on price or repairs.

A home warranty covers appliances and major systems in your home like plumbing and electrical. These policies do not cover everything that could be wrong with the home. For example, a warranty may not cover roof replacement or your septic tank. Do your research before accepting a warranty during negotiation.

Stay within reasonable limits

When negotiating a price after a home inspection, stay within reasonable limits. If your requests are reasonable and you can justify what you are asking, your negotiation process will be more straightforward.

For example, negotiate for a price that is in proportion to the amount of work the home needs. Asking for extra money off without justification can sour your relationship with the seller.

If you’re negotiating for repairs, stick to the ones that are most important to you instead of asking for a long list. A seller is unlikely to do a huge list of repairs, and it may cost a buyer their dream home.

Know when to walk away

Not every negotiation process will result in a closing sale. If you can’t agree with a seller about repairs or pricing, sometimes it’s a good idea to walk away. This is especially true if a property has significant issues and requires a lot of investment.

The home inspection contingency clause in your contract means you can walk away from the property and get your earnest money back.

How to counter offer after a home inspection

Making a counter-offer is different from negotiating a lower price. If your home inspection report indicates issues, you can come up with a counter-offer. This counter-offer should take into account necessary repairs and their cost.

Be sure to balance your desired price with the asking price, so your offer is not rejected. Work with your realtor on any counter-offer.

Common issues that a home inspection might uncover

Damages to a home fall into three general categories — expected/minor, unlivable, and uninhabitable.

Uninhabitable homes: have major safety concerns that need repairs and are the most reasonable to request.

Unlivable home: factors that make the property uncomfortable or difficult to live in. It can be broken appliances, HVAC issues, plumbing leaks, poor water pressure, or poor insulation. If the price of the home does not reflect its disrepair, many sellers will be willing to lower the price.

Common issues: Minor damages and repairs are expected in any home. The buyer can do these renovations after the sale is final.

Common repairs needed after a home inspection

A home inspection allows buyers to check the condition of their prospective home to find out what repairs it might need.

Some issues during the inspection might not be evident during a showing. Pay attention to the findings of your home inspection report and factor any necessary repairs into the total cost.

Electrical

Outlets and switches with deficiencies are common, according to the Repair Pricer. You might want to hire a licensed electrician to fix these issues, as they require specialized knowledge.

Minor electrical repairs could cost $50-100, and rewiring an electrical system in a house could range from $2,000 to 9,000, depending on the details.

Plumbing

The most common problems with plumbing are leaks and issues with pipes that are rusted or broken. Drippy faucets, mold, and water damage could signal serious problems.

Minor plumbing repairs like unclogging a toilet or fixing a leaky faucet cost between $125 and $350. Repairing the plumbing on a pipe leak could cost between $500 and $800.

Leaky or burst pipes could cost between $1,000 and $4,000 to repair.

Foundation

If the home inspection finds cracks in the walls, sagging ceiling, or uneven flooring, do a more thorough examination.

Not all foundation problems are fixable, as some of them could make a house unsafe for living. Major foundation problems could cost tens of thousands of dollars to remediate.

The foundation repair cost fluctuates between $2,000 and $7,500, with a national average of $4,500. Major foundation problems can cost between $15,000 and $25,000.

Roofing

A roof repair can be costly, depending on the extent of the issues. A home inspector could find missing or broken shingles or clogged gutters which might prevent the water from draining.

Roof replacement is one of the most expensive renovation projects, with an average price tag of $8,600 per project.

Mold

Mold is a significant health concern. If a home inspection identifies the mold, you will need to hire a specist who can help you remediate it.

Mold remediation costs an average of $2,347, and most homeowners pay between $1,373 and $3,325.

Termites and pests

A home inspector checks the property for signs of termites and other pests. If they find a sign of pests, hire a pest inspector who can give you a full extent of the problem. Mice, squirrels, or termites can cause severe damage to wiring and insulation.

The average termite treatment cost in the U.S. is about $575. Prices range from $230 to $930, depending on the scope of the problem.

Windows and doors

Windows should be free from cracks between panes. It will need a replacement if the window does not move or the weather stripping is worn out.

Weatherstripping seals gaps in your doors and windows. It prevents air from coming during the summer and heating from leaking in winter.

The price of weatherstripping ranges between $130 to $400 per project.

Replacing windows costs an average of $200 to $2,100 per window, with an average price of $750 per window.
The cost to replace a door is between $477 and $1,389.

What fixes are mandatory after a home inspection?

No state has laws that require a seller to do repairs following a home inspection. However, the type of market also determines whether or not a seller will grant repairs.

You can ask a seller to fix anything you want on the house, but that doesn’t mean that they’ll agree. Consider only asking for important repairs, and remember that major problems like mold or foundation cracks could be a deal breaker.

These issues make it more challenging to sell a property, and addressing them is in the seller’s best interest. Depending on the extent of these issues, it might make more sense for home buyers to counter-offer if the seller is unwilling to fix them.

A seller typically tries to shave off as little money as possible. A buyer and their realtor should calculate how much the fixes would cost and counter-offer a lower price that takes necessary repairs into consideration.

When to walk away from a home purchase after inspection

A seller has no obligation to fulfill any requests after a home inspection. Likewise, a home buyer has no obligation to buy a property if unsatisfied with the offer. This is only true if you waived your contingency.

This is where having a realtor and contracts in place is essential. You may have paid specific fees and costs before you had the inspection done. If you pay these fees before the inspection, your realtor should include a contingency clause. This helps buyers get that money back should they decide to walk away from the deal.

What if I decide to walk away?

Buyers can typically back out of buying a house before closing. But backing out is more difficult after both parties have signed a purchase agreement. If your goal is to keep your earnest money, check your contract to learn about the repercussions of walking away from the deal.

Can I get my earnest money back if I decide to walk away?

Earnest money is also called a “good faith” deposit. A buyer pays earnest money to show that they will follow through with the transaction.

Whether you can get your earnest money back, depends on the reason you want to back out of the deal. Most real estate contracts include three contingencies: home inspection, appraisal, and financing contingency. Under these contingencies, a buyer can walk away from the deal and get earnest money back.

If a buyer terminates the contract for a reason that is not specified in these conditions or other contingencies in the contract, the seller keeps the earnest money.

Other things to consider when negotiating after a home inspection

The state of the local housing market – a local housing market dictates prices, and you should research it to ensure you pay the adequate price
The area of the property – location is one of the major factors in real estate. Consider if a property has good access to amenities like stores, amenities, and what school district it’s in, among other factors.
The extent of repairs – a house that needs repairs could end up costing you thousands of dollars on top of the price you pay
Your plans for the property – if a house has a high price tag or needs repairs, make sure you can justify the expenses
The amount of time the house has been on the market – if a house has been on a market for a while, a seller could be more willing to haggle
The property’s history and age – the age of the property is important to consider when conducting home inspections and looking for age-related issues

Buyer’s market vs. seller’s market

When you are getting ready to buy a home, it’s critical to understand the dynamics of the housing market. The supply and demand of housing dictate the condition of the market. The job market and housing development can also create conditions for buyers’ and sellers’ markets.

What is a buyer’s market?

In real estate, a buyer’s market occurs when the number of available houses exceeds the number of buyers.

When buyers control the real estate market, sellers are willing to go the extra mile to accommodate their requests. Sellers might be willing to reduce the price or take care of the necessary repairs if a home inspection uncovers issues with the property.

Buyers can use this situation to negotiate the price and ask the seller to pay for some of the closing costs.

How to negotiate in a buyer’s market

You have a better shot at lowering a home’s asking price in a buyer’s market. When sellers don’t have many offers, they are more likely to make concessions and take care of necessary repairs.

When a home inspection report outlines significant issues, you could get a house below market value. A buyer’s market is the best time to buy a property, as you can get the most bang for your buck.

What is a seller’s market?

A seller’s market arises when the demand exceeds the supply. While there are many interested buyers, the inventory or the number of available houses is low.

A seller’s market is the opposite of a buyer’s market. In the seller’s market, buyers often go to greater lengths to make sellers accept their offer. For instance, buyers in a seller’s market could waive a home inspection contingency and accept a home as is to beat the competition.

Sellers could have many offers on their property. Some buyers also offer above-the-asking prices to make their bids stand out.

How to negotiate in a seller’s market

Negotiating a home price in a seller’s market can be tricky. Even if a home inspection report outlines issues, a seller might not be willing to take care of them. In a seller’s market, a home can have many showings per day and potential buyers who offer above the asking price.

Likewise, a seller doesn’t have to budge on the price in a seller’s market. If a housing inventory is low and there are many willing buyers, a house could sell quickly, even if it has issues.

But this doesn’t mean you can’t ask a seller to address the issues outlined in a home inspection report. Just remember that it’s not a guarantee they will satisfy your requests. They could have several offers on the house despite any issues that it might have.

Frequently asked questions about negotiating after a home inspection

What can I negotiate after a home inspection?

If a home inspection finds issues with a property, you should bring them up during a negotiation. Ask the seller to lower the asking price to cover the repairs or take care of them.

Do sellers have to fix all issues outlined in the home inspection report?

A seller has no obligation to fix anything following a home inspection. But that doesn’t mean they can just ignore the items that need repair, especially if they involve critical parts of a home like the foundation or roof. If the repairs you bring up are reasonable, there’s a good chance that a seller will take care of them or lower the asking price.

What should be my top concerns during a home inspection?

The most expensive issues found during home inspections should be your main concerns. They include structural issues, electrical and plumbing problems, water damage, HVAC, and roof.

These are some of the most expensive issues a home inspection report can find. If a home inspection report outlines them, a seller needs to address them. You can always walk away if major problems aren’t fixed.

Roofing problems
Electrical wiring issues
Poor attic ventilation and insulation
Poor grading and drainage around the home
Plumbing problems

Who pays for the home inspection?

A buyer pays for the traditional home inspection. Home inspections aim to identify any significant issues with a home before closing.

A seller could also do a pre-listing inspection before putting the home on the market. This tactic helps to make the property stand out from the competition and attract buyers. A seller pays for this type of inspection.

Negotiating after a home inspection: final thoughts

Negotiating a home price takes experience and patience. If a home inspection report outlines issues, negotiate wisely and how to handle the dialogue with a seller. Consult with your real estate agent to work out the solution to get the best price and close the deal.