Be reasonable when negotiating repairs

Blog Post Image

Okay, you've executed the contract, had the inspection and now, it's time to negotiate the repairs. I've seen a list of just about everything on the inspection report.  That is definitely going to overwhelm a seller and is not what I would recommend unless of course you really don't want the house.

Focus on the major items and for sure include anything that is a safety or structural hazard issue.  Foundation roof, HVAC, electrical and plumbing are major areas of focus for many buyers. Once you have the recommendations of the inspector for specialist to come out, schedule them for follow up ASAP.  Today I had a home with two Federal Pacific electrical boxes reflected on the inspection report. Albeit they are still in many homes, the inspector cites if there is a short they COULD cause a fire and are in need of updating.  That said you'd definitely want to negotiate for the upgrade to current electrical panels and perhaps even a rewire of the entire home as an example. 

Pick your top 3-4 items that you wish to negotiate on and leave the wood rot at the corner of the garage door alone. That's a quick fix and low cost. Pick your battles. Focus on big dollar and safety /structural items you wish to negotiate on.  Include the pages of the inspection report that correlate to the repairs you are requesting the seller compensate for either as a reduction in price or offset to closing costs. Apply to closing costs first as it has a larger and more immediate impact on your out of pocket costs to close.

If you the buyer do the repairs yourself, you a) know the work was done by a qualified, licensed individual and b) do not have to worry about a fictitious invoice (yes I've heard of this) and it was revealed when the buyer had a follow up call for a subsequent repair that it was never repaired initially, I was advised, c) the work is done to your standards, not someone who's eager to exit the property via sale.  Negotiate the dollar amount and take it in closing costs because this has a direct impact dollar for dollar on your costs to close vs taking as a credit to the price or price reduction because that is NOT a dollar for dollar benefit . These options will  have only a negligible impact on the mortgage over the term of say the typical term of 30 years.

Be precise (do not overwhelm the seller), Be specific (cite pages in the inspection report) calling out the repairs you are negotiating. Have written estimates available for the dollar amount you are seeking from a specialist in the field, Licensed electrician, plumber, etc.

Do not get ridiculous in your request to prove you WON, because you could alienate a seller and LOSE........I recently had an agent ask for $250.  I called back and said we've already settled on an amount and you want to waste your time and mine calling back and forth over $250?  He quickly realized how absurd this was and decided to relinquish his request. The goal is to win the house and treat the seller as you would want your buyer to treat you when it's time for you to sell. Reasonableness goes a long way in this negotiation process.