If you get a home inspection report back and it shows there are things wrong with a house you want to buy, it could pose a problem. Do you buy the house anyways and hope for the best? Or do you cancel the purchase and look for another home?
Luckily, these aren’t your only options. You can negotiate the repairs with the seller. This may sound easier said than done, though. You have several options at how you can tackle this issue. We’ll show you the options below and then you can decide which works best for your situation.
Change Your Offer
If there’s room in the home’s value, you may able to offer a higher price to the seller. The seller can then use the difference to pay for the work to be done. Of course, this affects you financially. The more money you borrow, the higher your loan payment and the more interest you pay over the life of the loan.
You do have the option to put more money down on the home as well, but again, it’s just like you paying for the repairs. You’ll want to consider this option long and hard. If you see the repairs as something beneficial for you and that you’ll see a return on your investment, it might be worth it. If not, you may want to try another tactic.
Another option you can choose when changing your offer is to ask the seller for a credit at the closing. Rather than trusting the seller to have the work done, you can hire contractors yourself. Essentially, you are still paying for the repairs, as the money is in your higher loan amount, but it puts you in control.
Don’t Nitpick the Little Things
When you go over the list of things that are wrong with the home, you’ll want to prioritize. For example, if there are issues on there that you can repair for under $100, it’s not worth it to ask the seller to fix them. You can fix them yourself without too much grief.
However, if there are bigger issues on the list, such as a busted pipe or hot water heater, you’ll likely want the seller to pay for those things. In other words, don’t hit the seller with a long and overwhelming list of things you want fixed. Instead, pick and choose among the ones that are the most important. This way you’ll have a better chance of the seller agreeing to your proposal rather than just telling you to forget it.
Agree to Have the Repairs Done After the Closing
Putting yourself in the seller’s shoes, it’s easy to see that it’s possible the seller doesn’t have the money to fix the issues right now. But, after you complete the sale, the seller may have the funds. You can make the closing contingent on the fact that the seller pays you the predetermined amount of money from his proceeds of the sale. In the end everyone wins – you get the house you wanted in good condition and the seller sells his house without taking cash out of his pocket.
Of course, you’ll have to sweet talk the seller into doing this because he’ll walk away with less money after the sale of the home. But, if it’s a serious enough issue, he should see the value in fixing the issue rather than trying to sell it to someone else. Once an issue is uncovered, the seller must disclose it to any future bidders, making it reality that the seller will have to fix it at some point.
Walking Away from the Sale
Sometimes, unfortunately, you just have to cut your losses and walk away from a deal. Not all sellers are willing to negotiate. There’s nothing you can do about that. They may think their home is just fine or think that because they aren’t living in it after the sale that they shouldn’t pay for the repair.
Whatever the line of thinking is that the seller has, it’s in your best interest to just walk away when you have this type of situation. The last thing you want to do is force yourself into a home that has issues that will cost you money right off the bat. You already have to budget between 2% and 4% of the home’s value in regular maintenance. Do you want to start homeownership off owing that money right away?
In the end, it’s your decision whether you negotiate the repairs or not. You’ll have to gauge the situation. See what the seller is like and how willing he is to bend even when you are negotiating the price of the home. You’ll know what’s right just from your dealings with the seller.