Jean Bradford, Managing Broker
John L. Scott
It can definitely feel like you're taking a beating. If your market leans towards a Buyer's market (over 7 months of inventory in your price range), then you are not positioned to have as much negotiating power. If your Realtor has shown you how many home are available in your price range and you have less than 5 months of inventory, then you are probably in a Seller's market. Know what your market specific position is before making any final negotiating decisions.
I would definitely make sure that the inspector is correct - verify it needs repair and then do it.
Good luck! This will all be behind you soon enough.
BTW, as to Jirius' answer, it probably depends on the home warranty company, but the only pre-existing conditions I'm aware that they will fix is the furnace, and only if you were signed up before it failed.
All the best
Wish I could be of more help, but the course of action really lies in your hands, and acting on what you feel is best for you.
You can always negotiate with the buyer as to who does the work. For instance, you could subtract the cost of the repair from the purchase price with the stipulation that they do the repair after closing in exchange for a reduced purchase price.
I hope some of what I suggested today helps the situation you are facing.