How to negotiate the buying price of a home after inspection

negotiating after inspections

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When you buy a house, a home inspection is highly recommended. You aren’t just buying a high-end kitchen, or cozy family room with a fieldstone fireplace, you are also buying any problems lurking behind the walls. The home inspector will look at structural issues and other potential problems that could make the home a bad investment. After the inspection is completed, you usually have about 10 days to pull out of the sale.

If your inspection comes back with a laundry list of items, don’t freak out. Inspectors are required to point out any issues, no matter how big or small they are. Don’t panic at the thought of having to tackle some major repairs though – the key is negotiating repairs with the home seller. Here are some tips for doing so successfully.

Don’t focus on the small stuff. You’ll find small issues on the report like a deck with peeling paint, trim that might need caulking, or even small stains on carpet flooring. You might also be fixated on a scratch on the hard wood floor or ugly paint colors. All things to tackle in good time, but not necessarily something that you want to bring back to the negotiation table. Concentrate your time and attention on major, structural issues rather than cosmetic ones. Keep in mind that sellers are required to fix any water penetration issues such as a wet basement or moldy walls and any local code safety violations such as missing handrails or an unstable deck.

Ask for repair money not repairs. Asking to reduce the selling price is almost always more useful than asking the seller to fix large items, like a new roof, septic, furnace, etc. (unless required by the lender for the type of loan). When asked to make the repairs, the seller is no longer invested in doing a good job – they more than likely will have the repairs done at the least possible cost. If agree to repair money you can have it done the way you want.

Don’t trade dollars for pennies. When you focus on the small stuff and provide a large list of repairs, you give the seller the chance to fix all the smaller inexpensive items, and come back and say that they’ve already agreed to fix so many things, made so many concessions and they just can’t do any more. They may have fixed a large number of items, but not the important ones. When you stick to the ones that really matter, it ensures that the seller will take you seriously.

Offer solutions that help everyone. A seller may not have the funds to fix larger repairs before the closing. An option may be to let the seller pay for the repairs with escrow money after the closing

No matter how good you are at negotiations, you can’t wring out a dry rag. Another option may be to build in closing costs. Depending on the house you’re buying and the situation of the seller, you might be able to get the sellers to pay closing costs instead of repair credit. It’s usually a win-win for everyone but be smart about it. It may be a big repair, but that doesn’t mean you have to automatically walk from the deal. In the contract, you can make the sale contingent upon the seller setting money aside from the proceeds of the sale for the repairs. 

When to Walk from the Deal. Sometimes a deal just can’t be salvaged and it’s important to know when to walk away. Even if you love the house, if you don’t have enough cash available to make the purchase with a down payment and make the repair, you can’t pull the trigger. The worst thing you can do is put yourself in a situation where your new house is a money pit.

When you should stop negotiating. Once your original “list” has been agreed on, the last thing you should do is add to it unless something changes. The goal is to come to a fair agreement, not milk the seller for every penny possible. When the big-ticket items are settled you, it’s time to stop negotiating and go for the close.

Negotiating after a home inspection can be a super stressful time for everyone involved.  You were hoping for a clean bill of health, but the home inspector came back with bad news.

Don’t let small, petty items derail the deal.  Focus on the main items, get it settled up with the seller and close the deal on the house. A real estate transaction is never a done deal until the money changes hands and the deed is transferred. If you have questions about how the mortgage process works or what to expect, give us a call or stop into any of our five convenient locations.


Jennifer Ives-Groebl
Vice President, Senior Mortgage Lender
NMLS MLO ID: 532621

Author: Jennifer Ives-Groebl

Jennifer has been with Litchfield Bancorp since 1994 and was promoted to Assistant Vice President and Senior Mortgage Originator shortly after graduating the Connecticut School of Finance & Management in 1998. Stationed in both our Torrington and Litchfield locations, Jennifer is well known and respected in the local residential real estate community and recognized as a resource for some of the more difficult transactions. Jennifer resides in Torrington and is actively involved in the local community. She is a long time member of the Torrington/Winsted Rotary club and is currently serving as its Assistant Treasurer. Jennifer is involved with Litchfield County Board of Realtors and serves as chair of the Audit Committee and a member of the Public Relations Committee. She is also a member of the Fuessenich Park Partnership; and through Education Connection, has participated in the Mentoring Program.