Negotiating Repairs for Your New Home

Negotiating Repairs With Home Sellers As a home buyer, price negotiations can be tricky. With the help of an experienced agent, buyers want to make an offer that hits the sweet spot; high enough for a quick acceptance, yet low enough to be a great deal and keep any monthly payments to a minimum.

But how should a prospective homeowner move forward with negotiations when the house in less than ideal condition?

Before the Home Inspection

You find a home that meets all of your criteria for size, location, and amenities, but you notice that the carpeting is in tatters or the countertops are less than ideal.  Typically, the easiest and most common way to handle this is to make an offer that takes into account the current condition of the home. A home that needs a serious kitchen update or new flooring is going to sell at a lower price than an updated comparable home.

It is also not out of the ordinary to ask the home seller to make certain repairs or upgrades. Typically the seller cannot just give the funds for repairs directly to the buyers.  In most cases, they will pay the contractor directly or money may be provided as a seller subsidy with lender approval.

After the Home Inspection

In a tight bidding situation, some prospective buyers may be tempted to waive their right to a home inspection in order to make their offer more attractive to the seller.  This is a serious error, however.  A thorough home inspection gives the buyer leverage to get the seller to make needed repairs to the home before the deal closes. At the same time, the home buyer should not treat the home inspection as a punch list, expecting every single item to be addressed by the seller.

After a home inspection is complete, many buyers choose from four options:

  1. Negotiate repairsIn certain circumstances, major repairs are uncovered in an inspection and the seller will need to fix them no matter who the future buyer is.  In these cases, asking them to complete the work prior to closing is often in the buyer's best interest.
  2. Renegotiate the price - If the home buyer has the financial resources to complete the necessary home repairs, this may be the best option. The new homeowner can then have the repairs completed by a contractor of choice and done to their satisfaction.
  3. Move forward - A used home is just that - a used home. As such, the buyer should not expect the home to be in pristine condition. Every new homeowner will need to make some cosmetic repairs and complete basic maintenance on an older home. 
  4. Cancel the transaction - If the inspection uncovers too many issues or the buyer and seller cannot come to an agreement, the buyer may be able to back out of the deal and pursue other properties.

When repairs are necessary, what major items are best negotiated by home buyers?  

  • Roofing issues - Roofs that are leaking, improper installations, and shingles that are at the end of their expected lifespan should be replaced before they fail.
  • Hazardous issues such as electrical or dysfunctional mechanicals - When it comes to safety issues, the home buyer should use as much leverage as necessary to resolve the problems.  Faulty wiring, water issues that can cause mold, or unsafe heating devices are serious problems that must be addressed immediately.
  • Serious foundational or masonry issues
  • Large exterior problems - This can include siding, unsafe decks, termite issues, or windows that are in need of replacement.

When negotiating repairs, concentrate on major issues that significantly impact the value of the home and its financing options. Working closely with your real estate agent will help immensely. They have the experience of negotiating in many home sales, and will know what course of action will help you find the right home at the right price!


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