Home Buying in Brooklyn>Question Details

MPP, Other/Just Looking in Brooklyn, NY

Negotiating after an inspection

Asked by MPP, Brooklyn, NY Tue Jul 10, 2007

After you and the seller has agreed on a price, and you perform an inspection, if the inspectors report shows major problems like foundational cracks, illegal additions, out dated electrical system, how do you negotiate a better price based on the information?

Help the community by answering this question:


It truly is dependant on a variety of issues. If an inspectors report shows this major an issue my buyer must decide whether or not they want to pursue the home in the first place. An issue such as a foundation crack is repairable but will still cause issues selling the property down the road.

If the buyer truly does want to continue purchasing this home and their blinders have been taken off then we have to look at many other things. Was the property priced for a property with this issue, or was it all full market value? How much would it cost to repair the issues, and does it affect the health or safety of the client.

I would then get together with the other agent and lay the answers down on the line. They may or may not be willing to sell it for less, but my client can choose to not purchase the property.
Web Reference: http://www.ChrisTesch.com
3 votes Thank Flag Link Mon Jul 16, 2007
Every state has a different way of going through this process. In Colorado we have a form for the buyer to ask the seller to either fix/replace/repair unsatisfactory items. The buyer actually has the opportunity to decline purchasing the home or have the seller fix the items.

Depending on the issues the seller may choose to fix all, some or give the buyer a cash settlement to have the items taken care of. It is uncommon for the price to be reduced on the home, but it is possible.

Buyers need to remember to request on items of safety issues or big ticket expenses to be taken care of at this point.

In the case you have stated, all the items appear to be significant. If the house wasn't priced accordingly that may be a good reason to seek a price reduction. If the condition was taken into consideration in the price then there may not be as big an issue as it appears.

You will have to determine that based on the facts. Good luck!
Web Reference: http://thedenver.blogs.com
2 votes Thank Flag Link Mon Jul 16, 2007
It really depends on the problems found and how my client feels about them. In a resale home I would expect to find some issues. The buyers should know that in advance. If the issues are major, especially if they are safety or environmental, then I would suggest we get a couple of quotes and request that the seller give us a credit to fix those items after close. My suggestion is that my client oversee repairs on their own so that they are done to my client's satisfaction.

It also depends on the ordinances in your community. Some areas require a city inspection to make sure that the home meets current codes. In those cases, anything found would be the seller's responsibility.
Web Reference: http://mioaklandcounty.com
2 votes Thank Flag Link Tue Jul 10, 2007
Maureen Fran…, Real Estate Pro in Birmingham, MI
Every way possible:
1. Discount so you can do the repairs.
2. Raise the price and let the seller do repairs.
3. Same price and seller does repairs.
4. Same price with money in escrow for you to do repairs.
5. Split the costs.
Web Reference: http://www.teamlynn.com
1 vote Thank Flag Link Tue Jul 10, 2007
Bruce Lynn, Real Estate Pro in Coppell, TX
I am going through the same scenario. During the inspection we found more problems with the unit and it's only one year old. The renters in the unit wore out the carpet, punctured almost all the walls, removed kitchen cabinets doors (???), stained the granite counter tops, and destroyed the glass top stove. We responded to the inspection with a request for additional repairs. The seller agreed to credit us another $2k. I am sure the owner will go after the tenant for more money beyond the security deposit. What a nightmare tenant for the owner. So basically you can put your list together and ask for the high priority fixes to be completed prior to closing. Seller will probably respond by offering a small credit at closing.
0 votes Thank Flag Link Fri Aug 17, 2007
It depends how bad the inspection is! I tell the buyers they are purchasing a used home, it will have the usual wear and tear. As long as it is structurally sound, has heat, electricity and water, I do not advise negotiating further.
0 votes Thank Flag Link Fri Aug 17, 2007
It depends on the severityof the items called in the inspections. The buyers here are usually lookingat health and safety issues rather than cosmetic ones. Some of the items you mentioned are discovered during the inspection process and room additions may have been disclosed upfront.

Sellers have been asked in the past to repair or correct deficient items that came up in the property inspection rather than reducing the price.
Web Reference: http://pamwinterbauer.com
0 votes Thank Flag Link Sun Aug 12, 2007
Pam Winterba…, Real Estate Pro in San Ramon, CA
I would show the inspection report to the seller, within the allotted period of time for the home inspection and repair period, and negotiate based on the cost of repairs, and how much you think the inspection results will effect the overall value of the house.

Given the serious nature of the problems you listed though, I would recommend my buyers take careful consideration as to whether they want to proceed with that particular house. Every state and every contract is different, so I hope you're able to walk away if necessary, and not lose your good faith deposit.
0 votes Thank Flag Link Sun Jul 15, 2007
In the state of Texas our contract contains a clause that allows for an option period, which is paid for by the buyer to the seller. This option allows a period of time, usually 10 days to have inspections made. If repairs cannot be negotiated between buyer and seller in this time frame, the buyer has the "option" to change his mind, and his only loss is the amount of his option fee.
0 votes Thank Flag Link Tue Jul 10, 2007
Hi Map:
Your description of post-inspection findings is alarming. If I were your agent I would be taking a good long look at the discrepancies listed.

Are you certain you want to negotiate a new price? The items you listed should be cleared before pen is placed to paper. The "illegal additions" could stall the whole transaction - if proper permits were not filed.

You could be held liable for the shoddy condition of the property once you become the "owner", i.e. outdated electrical system and foundation cracks - if they are that bad the property could be condemned until they are brought up to code.

Think long and hard - there's a lot of property on the market. This seller should have disclosed a lot of what the inspector found - before you agreed on any price.

I assume you have an agent - but from your question it sounds as if you do not. My best advise to you after all this is to get an agent - and get yourself represented!
0 votes Thank Flag Link Tue Jul 10, 2007
The items you have mentioned are pretty serious. Usually the inspector can give you an estimate of the cost involved in repairing it. Ideally, you did this inspection before your contract. Therefore, there are two common options: 1) Negotiate the cost involved in the repairs or 2) The seller will agree to fix all of the items and be reinspected before closing.

As always, consult your attorney for their input and advice.
0 votes Thank Flag Link Tue Jul 10, 2007
Hi there, I guess the first question is whether or not you are working with a Realtor. If you are, they should be able to either negotiate the price or $$ instead of repairs. It will also depend on if the price has already reflected the possible need for repairs and is below market value. If you are working this deal without a Realtor, make sure that you get several estimates for repair work that might need to be done and have those readily available when you start negotiating the repairs. Also, make sure all negotiations are completed and signed by all parties before the end of the option period (in Texas). Hope this helps you. If you are in need of a Realtor, please give me a call and I can head you the right direction-210-412-1182
Web Reference: http://www.dialthedivas.com
0 votes Thank Flag Link Tue Jul 10, 2007
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