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How to Negotiate After a Home Inspection: 5 Tips for Sellers

Inspections are a crucial step in the home selling process and can bring to light some defects and abnormalities of a property you have listed. To help you walk away with the most from the sale, read these five tips for sellers on how to negotiate after a home inspection.
Inspections are a crucial step in the home selling process and can bring to light some defects and abnormalities of a property you have listed. To help you walk away with the most from the sale, read these five tips for sellers on how to negotiate after a home inspection.

Smart real estate professionals recommend that every home buyer get a home inspection before buying a home. A home inspection is one of the most crucial steps in the home buying and selling process. A home inspection offers disclosures to both the buyer and seller that an agent typically can’t provide.

The outcome of a home inspection can mean a few different things for sellers and buyers. For a seller, it will shed light on defects you might not have known of when you listed your home. Some of these flaws can be a deal breaker for a buyer, which ultimately ends the sale. They also serve as negotiation leverage. You’ll want to know how to negotiate after a home inspection before making an attempt.

Be Upfront With Defects

It’s important to be upfront with buyers about defects in the house. Sometimes sellers worry that by disclosing problems, the buyers will demand they make all necessary repairs. This is a reasonable concern, because not every seller has the money to front a long punch list of repairs. However, by not following the disclosure laws in the respective state, a seller can find themselves in an expensive legal situation.

Being honest with the buyers will also instill a level of trust and transparency that can work out in one’s favor. Some buyers are understanding and know that a seller doesn’t have the money to fix flooring, windows, HVAC, and a roof. By disclosing these problems at the beginning, you and your agent can work with the buyers to come to a mutual agreement about who pays for what.

Push for Inspection Credits

During the home selling process, specifically, when negotiating inspection items, you may want to push for a closing cost credit or price reduction instead of making complex repairs. Negotiating home inspection issues isn’t always easy, but you’ll want to go this route as a seller to save time and money.

There is too much stress and uncertainty that comes with being responsible for making a repair yourself. The buyer will likely be picky about the quality of work, who performs the repairs, and which materials they use. During this time you’re trying to finish packing and preparing for a move, which leaves most sellers for minimal time to make repairs.

It’s easy to see how making the repairs yourself can cause more issues down the line. The repairs can take longer than you thought, which potentially delays the closing, so the buyer or their attorney walk away from the sale because they won’t hold back escrow.

These reasons are why most real estate agents recommend you offer the cash value of the repairs, negotiated down as much as possible, instead of offering to do the repairs yourself. To remove all the stress and anxiety that comes with making repairs, delaying closing, or ultimately causing the buyer to walk away, it’s best to let the buyer pick their own contractor and do the repair themselves.

Research the Value of Repairs

Let’s say you get the home inspection report back and both you and the buyer realize there are quite a few defects that require repairs. It’s likely that the buyer will demand you either fix them or lower the price of the house or help cover some closing costs. Any of these options are fine, but you want to make sure you research the value of the requested repairs.

The biggest benefit for doing this is deciding whether it’s cost effective for you to fix the repair yourself or offer to cover costs and lower the sale price. You might think a repair will be expensive, then lower the price of your house only to find out that the repair would only cost $1,000. Now you’ve missed out on a few thousand dollars from the sale.

One of the first things you’ll want to do is talk to the home inspector about the major flaws. They have experience knowing which repairs get requested that buyers fix, and how much they can cost. You can also ask your real estate agent to see what they know about certain repairs and give you guidance on typical costs and time duration.

You can also look up typical costs on the internet or consult a contractor. Having multiple sources will help narrow down a price and show the buyer you’ve performed research. This will come in handy if they try to get you to lower the price of the house or ask for money to cover repairs.

Know When to Walk Away From a Deal

It’s important to know when it’s time to walk away from a deal. While it might seem counterproductive, you won’t want to go through a deal with buyers who are asking you to lower the price of the house, help cover closing costs, and make repairs.

You’ll want to think about walking away if a buyer makes lowball offers. Your best bet is to talk to your real estate agent and see what they think. They get a portion of the sale in commission, so they won’t benefit from a lowball offer either.

You’ll also want to think about ending a deal if the buyer threatens to walk away from the sale to get what they want. While in a buyer’s eyes this might seem like a productive negotiating tactic, this can go south fast.

Trust your Real Estate Agent

Your real estate agent will be your first source of knowledge. Their job in this situation is to guide you through the home selling process and to give you advice on what decisions to make. They have experience with the negotiation process and know how to filter out serious buyers willing to make a good deal with you.

If you have yet to hire a real estate agent to help sell your home, partner with an expert Clever Partner Agent. By working with Clever, you get matched with an experienced Partner Agent in your area. They will negotiate on your behalf to help you get the most profit out of your home and alleviate some stressors that come after a home inspection.

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Andrew Schmeerbauch

Andrew Schmeerbauch is the Director of Marketing at Clever Real Estate, the free online service that connects you top agents to save on commission. His focus is educating home buyers and sellers on navigating the complex world of real estate with confidence and ease. Andrew has worked on projects for the United Nations and USC and has a particular passion for investing and finance. Andrew's writing has been featured in Mashvisor, L&T, Ideal REI, and Rentometer.

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