So, you’ve found your dream home and submitted an offer. Now you’re moving to the next phase, the home inspection.
The home inspector discovers some problems that require repairs. You ask the seller to fix some of those problems, but they refuse to negotiate.
This can be an awkward and, oftentimes, common situation that may leave you feeling unsure about what happens next.
We’ve put together some tips to help you figure out how you can move forward with the sale or walk away from it.
What You Should Know About Negotiating With the Seller
When it comes to negotiations after a home inspection, there are some considerations you should take into account to increase your chances of getting repairs taken care of by the seller. You should know when a seller is obligated to make repairs and the difference between a reasonable or unreasonable repair request.
Does the seller have to make repairs on the home?
In most cases, sellers don’t have to make repairs on the home.
However, some repairs are nonnegotiable because of state regulations:
- Smoke detectors
- Carbon monoxide detectors
- Water heater straps
- Automatic gas shut-off valves
- Other retrofit items
Talk with your real estate agent to find out if there are state regulations that would give you more leverage when you’re asking for certain repairs. The seller may not have known about the regulation and you may be able to revisit negotiations.
What is a reasonable repair request?
If the seller refuses to negotiate on repairs, you may be wondering if what you’re asking for is reasonable.
It’s reasonable to ask for repairs related to:
- Major health and safety concerns (like mold, water damage or fire hazards)
- Structural issues (like foundation or roof problems)
- Some building code violations (like improperly functioning electrical or HVAC systems)
But, unless the problem is a state-mandated nonnegotiable, sellers don’t have to fix it.
What is an unreasonable repair request?
Maybe the seller refused to negotiate on repairs because they felt that your request was unreasonable. Minor issues that are more of an inconvenience than a major problem that impacts the quality and value of the home usually qualify as unreasonable requests.
It’s unreasonable to ask for repairs related to:
- Cosmetic repairs (like paint colors, landscaping or trim work)
- Normal wear and tear (like driveway issues or floor scuffs)
- Inexpensive repairs (like holes in walls from pictures or loose fixtures)
What Should I Do if the Seller Refuses To Negotiate After the Inspection?
Negotiating with the seller after a home inspection can be beneficial for the buyer, but the seller isn’t obligated to negotiate.
If the sale is considered as-is (more on that later), you likely won’t be able to change the seller’s mind about repair requests because they made it clear from the get-go that they aren’t interested in making repairs or negotiating on repairs.
It’s easy to understand that you don’t want to lose everything you’ve worked so hard for after all the back-and-forth conversations and pre-inspection purchase offer negotiations.
So, if the seller refuses to negotiate after a home inspection, you have a few options:
- Try a different negotiation approach
- Buy the house as-is and make the repairs yourself
- Walk away
Try a different negotiation approach
Knowing how to negotiate may be the key to getting the seller to reconsider a negotiation.
There are many strategies to help you negotiate with the seller after a home inspection, like getting repair quotes, knowing the market or prioritizing certain repairs.
If your first attempt at negotiating with the seller didn’t work, see if you can readjust your pitch for repairs with these strategies:
- Know the real estate market: If it’s a seller’s market, you may have less of an advantage because there are lots of home buyers (and offers) for the seller to choose from. If it’s a buyer’s market, you may have more of an advantage because fewer buyers are competing for homes.
- Get quotes: Try strengthening your request by getting a formal quote for repairs from a contractor. It’s a signal to the seller that it’s a “real” number, and the seller knows you’ve done your research.
- Use your real estate agent or attorney: Have your real estate agent put together a revised offer or work with a real estate attorney to present your case. This may boost your chances of renegotiating successfully because the offer is coming from a trusted third party.
- Prioritize: Prioritizing your repair requests by cost and severity can help you decide which repairs the seller may be more likely to reconsider.
- Be reasonable: Put yourself in the seller’s shoes and ask if you would agree to what you’re asking for. A change in perspective may help you readjust your negotiation strategy.
A buyer can make a strong counteroffer after a home inspection by reviewing the facts, talking with their real estate agent and being reasonable.
Buy the house ‘as-is’ and make repairs yourself
In some cases, your best option will be to stick with the current offer and begin budgeting to make the repairs yourself.
First, talk with your real estate agent to decide if purchasing an as-is house is in your best interest. Consider what repairs you’ll need on the home and how much they’ll cost. You should also think about the other homes you’re thinking about buying.
If the seller won’t pay for repairs, you may be able to negotiate a repair credit from the seller on closing day.
A repair credit reduces a buyer’s closing costs and puts the responsibility of making the repairs on the buyer. The repair credit helps you save money upfront, and the money you save can be applied to repairs.
It might be worth it to ask the seller to pay for the first year of a home warranty policy. Even if the seller doesn’t agree to pay for it, it’s still an important policy to have because a home warranty covers the repair and/or replacement of major appliances and home systems.
The state of the housing market is often the determining factor when you’re deciding whether to move forward and close on a house or walk away.
Working with a real estate attorney and having an inspection contingency in place will likely play a role in your final decision.
Quick refresher: The inspection contingency clause in a sales contract allows the buyer to make their final purchase offer based on the home inspection report.
The clause also protects the buyer from losing their earnest money deposit if they back out of a sale based on the results of the home inspection. Make sure you know what the conditions are in the contingency that allows you to walk away penalty-free.
Before you walk away, be sure to ask yourself:
- What’s my timeline for moving into a new home? Can I afford to wait for repairs or should I walk away?
- What’s my budget for making repairs? Can I complete any of the repairs myself?
- Would the home’s value rise enough after the repairs to recoup the cost or would I lose money?
- Am I getting a good deal on the purchase price based on the real estate market right now?
- Is it worth it to walk away from this home for $[fill in the blank] in repairs that the seller isn’t willing to pay?
- Have I exhausted all of my resources (think: attorneys, contingencies, etc.) to negotiate repairs?
Your answers to these questions can help you decide whether to renegotiate, buy the house as-is or walk away.
Deal or No Deal?
You don’t want to lose your dream home after the home inspection.
If the seller has refused to negotiate after the home inspector found issues, you’ve got options. Try a different negotiation approach to get the seller to change their mind, buy the home as-is or walk away if you feel you can’t justify the purchase price and the cost of repairs.
Remember, sellers aren’t obligated to make repairs. But knowing what is a reasonable or unreasonable repair request may increase your chances of a successful repair negotiation.
Armed with all of this information, you’ll have the confidence to go back to the seller and ask, “Deal or no deal?”