Whether you’re buying a newer home or a fixer-upper, a home inspection is one piece you don’t want to leave out of the home-buying process. A professional inspector can uncover problems with the home, and based on their report, you can try to negotiate the final sales price or request that the seller make important repairs.
Homebuyers saved an average of $14,000 on the final price of their home when they negotiated after the inspection, according to a survey from real estate technology company Porch. So, if a home inspection report comes back less than satisfactory, it’s in your best interest to negotiate.
Major issues commonly found during home inspections
Home inspections can reveal just about anything, but some common issues pop up during real estate transactions. It’s a good idea to address these issues with the seller, so you’re not dealing with costly repairs after you buy the house:
- Broken HVAC system: Your HVAC system is an important part of keeping your house comfortable, and replacing one may cost between $5,000 and $10,000.
- Plumbing issues: A home inspector could find anything from simple leaky pipes to a cross-connection that may contaminate your water. If left unnoticed or unrepaired, bad plumbing could lead to small floods or cause mold to spread — and homeowners insurance may not cover a claim if you’ve neglected the issue.
- Faulty wiring: A worn, outdated, or improperly installed electrical system could pose serious safety hazards. In fact, electrical problems cause about 51,000 fires and $1.3 billion in property damage each year, according to the Electrical Safety Foundation International.
- Asbestos, mold, and other toxic materials: Exposure to any kind of mold or toxin can lead to health issues, such as headaches and respiratory problems. Asbestos in particular can cause cancers and other serious diseases.
- Structural issues: Damage or shoddy craftsmanship may lead to angled floors, sagging and dangerous roofs, or cracks that invite pests and water damage. These issues may be especially prevalent in older homes and fixer-uppers.
- Pests: Your home inspection might reveal a few minor bugs and pests, but the presence of termites is a major red flag that could indicate further damage to the home.
- Window and exterior door issues: Leaks, cracked panes, and improperly sealed doors and windows could leave your home vulnerable to moisture stains and mold growth.
- Radon: This colorless, odorless gas is the No. 2 leading cause of lung cancer, according to the Centers for Disease Control and Prevention.
If a home inspector notices any red flags that may indicate serious issues with the property, they might recommend getting a specialty inspection. Here’s what you can expect to pay for these kinds of inspections:
How to plan for a home inspection negotiation
Before diving into the negotiations, do a little prep work and improve your chances of success.
Review the inspection report with your real estate agent
After the inspection, you’ll receive a report that summarizes the inspector’s findings. While no home is perfect, you’ll need to figure out what kind of damage you’re comfortable taking on.
Your real estate agent can help you identify which repairs you should handle and the ones you can negotiate. Sellers aren’t obligated to make any repairs after a home inspection, but you might be able to work with them — especially in a buyer’s market.
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Prioritize the repairs
The home inspection report highlights necessary repairs along with safety concerns, damage, and defects around the property. As such, it can help you prioritize the most important issues.
Inspectors can’t provide you with an estimate of the cost of repairs, but you can use the report to research costs online or call local contractors for estimates. Before you start negotiations, break down the repairs into three categories:
- Dealbreakers, or major defects that need immediate attention
- Important but less expensive issues that can wait
- Minor, inexpensive issues
Good to know:
While a seller is incentivized to negotiate with you on repairs to help close the deal, they’re not legally obligated to make or pay for any of them.
Use your home inspection contingency
A home inspection contingency is a clause you can add to your purchase offer. It says you may back out of the transaction if you’re not happy with the home inspection results for any reason.
Roughly three-quarters of homebuyers use home inspection contingencies. If your contract includes one of these clauses and you don’t want to deal with any repairs or negotiations, then you can cancel the home purchase and receive your earnest money deposit back.
7 tips for negotiating after a home inspection
Negotiating after a home inspection takes some time and effort, but it’s an important step. You might save money by getting the seller to cover some costs or lower the price of the home. Follow these steps when negotiating after a home inspection:
1. Hire an experienced real estate agent
Your real estate agent acts as a middleman, so they can help you identify which repairs to negotiate and talk with the seller on your behalf.
An experienced agent should have ideas on what to do if the seller is unwilling to address your requests. For instance, your agent may suggest asking for a seller credit, a price reduction, or a home warranty. They’ll guide you through the process and advise you on important decisions.
2. Only focus on the major repairs
A home inspection report may reveal problems both big and small. But you might want to let the minor issues slide if you want to close the deal. Focus on asking the seller to fix major problems, such as:
- Building code violations
- Structural defects
- Serious safety concerns
- Systems or appliances that are expensive to fix or replace
Then figure out if you can cover the cost of the remaining repairs yourself before moving ahead with the deal.
3. Opt for a credit or price reduction instead
Instead of asking the seller to pay for the repairs, you can use the inspection report to negotiate in other ways. For instance, the seller may be willing to reduce the home’s purchase price or provide a seller credit, which is essentially cash that goes toward your closing costs.
These options might be preferable if you want to save on the mortgage or control the repair process.
4. Think long term
Before you spend the time and effort negotiating on specific items, think about your long-term plans. For example, don’t bother negotiating wonky cabinet doors or outdated kitchen appliances if you plan on renovating the kitchen in the near future.
5. Provide supporting documents
When you or your real estate agent negotiate with the seller, bring supporting documents such as pages of the inspection report, quotes from contractors, and research from credible sources. To validate the repair, you should know how much the repair costs and why you’re making the request.
6. Ask for a home warranty
A home warranty is a policy that pays to repair or replace appliances and basic home systems during a certain coverage period. If the seller isn’t willing to make repairs, reduce the home’s price, or offer seller credits, they may purchase one of these policies on your behalf.
A warranty can ensure you won’t be on the hook for a major bill within the first year or two of homeownership. This could be a good option if some of the items in the home are very old or worn but don’t need repairs quite yet.
Good to know:
Home warranties are different from homeowners insurance policies. Mortgage lenders require homeowners insurance as a condition for home loans, but a warranty is optional.
7. Be reasonable
It can be easy to feel frustrated with a seller who won’t pay for everything on the inspection report but try to understand their point of view. The seller has their own costs to consider and may be able to cover only the most pressing repairs.
While the seller should be prepared to make a few concessions, you shouldn’t expect major upgrades. Because you both want to close the sale, you’ll likely be able to compromise in some regard.
