Is there an art to negotiating the deal?
You have negotiated a savvy deal on your new home and you are awaiting your home inspection results. The home looks beautiful and you like the way it makes you feel until you review the inspection results. Perhaps a new roof is recommended, a new furnace will be needed, or window replacement is on the horizon. Maybe the scenario is not so dismal or expensive but there are things to be done. What is your next move?
You will first go through your concerns with your realtor and/or attorney to see what they recommend. Some options to consider:
1) Ask the seller to make the repairs at their expense. In this situation most lenders are going to require the work to be done prior to a closing with evidence that the repairs have been completed and paid for
2) Ask for a price reduction based on the estimated repairs needed. In this scenario most sellers will ask for evidence of the costs and may want to see a copy of the inspection results
3) Ask the seller to contribute toward your costs to do the loan – the amount that they contribute will be based on your loan-to-value. This can actually be a great scenario because it’s money that you won’t have to bring to closing and leave you with funds in savings for repairs
4) Do nothing and buy the home “as is”
Home repairs can be expensive and you will want to take what needs to be done into consideration.
On the other hand, if the home inspection comes back with items that are based on age and what you may already anticipate being mentioned you will likely only approach the seller for either a price reduction or credit toward costs.
What I recommend that you don’t do in this situation is write an addendum using strong language about items that are in disrepair in order to get the seller’s attention and seek a credit at closing regarding what is needed, i.e., “serious issues with roof/windows based on the home inspection” – this may lead to a can of worms that is better left unopened. For one, the lender may want to see a copy of the inspection report, which is typically never needed and if the appraisal is already completed this addendum will need to be provided to them as well and they may want to see a copy of the inspection report. Your lender or the appraisal may require something additional be done. This all takes time and will create anxiety for everyone unnecessarily. It is better to be forthright and simply ask for a seller credit toward the cost to do the loan without embellishing the reason.
The old saying “honesty is the best policy” still fits. Keep it simple in regards to what you want and why – this is always your best bet.