Pat Kennedy - Your Washington, DC Real Estate Connection

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Negotiating Inspection Repairs: Don't Overwhelm the Sellers!

There have been more than a few transactions when my sellers were faced with an inspection repair list that took up three pages of single spaced, fine print, with demands that seemed to amount to rebuilding the entire home - and many of these homes were in more than good condition to begin with.  The sellers, more often than not, went into overwhelm and refused to do anything. 

Who needs these buyers anyway?  Especially in this market.

All home inspectors have their styles, as do the buyer brokers who help their clients craft their to do list for the sellers. 

Some focus on the important stuff - the major systems and appliances.  Others note every nick in the paint, squeaky door hinge, burnt out light bulb and empty toilet paper holder.

My advice to my buyers is to stick to the important issues that you want the sellers to address. 

  • If the issue is something that the sellers disclosed to you before you made the offer, then you should have factored it into the price and terms of the contract.  If it was not disclosed, or even hidden, then asking the sellers to fix it is completely reasonable.
  • I put the electrical system at the very top of my list, because a failure could create total havoc.
  • Any item that could present a serious health issue also makes the list.
  • Plumbing can be important or not.  Asking sellers to have leaks and drips fixed is usually reasonable, but I suggest my buyers leave off this type of repair for a bath or kitchen they plan to rip out and renovate.
  • I consider it to be rude to put anything on the punch list that can be fixed with a bottle of WD-40. 
  • I've started to carry a test light bulb to inspections so we can tell if it's a bulb or the fixture. 

Often, the request for inspection repairs sets the tone for the rest of the transaction.  If you beat up on the sellers at this point, they will not look kindly on other requests that you might have to make of  them down the line.  What if something happens and you need an extension on the appraisal or financing deadlines?  What if you have to come back and ask for a pre-settlement occupancy agreement? 

And in many cases, unreasonable requests raise questions about good faith.  Sometimes, especially if the buyers "won" a bidding war, they may appear to be trying to renegotiate the contract.  Other times, the buyers may be sending a message that they want out of the deal.  Even if you were to meet all of their demands, would they try to find another way to avoid buying? 

 

If you are planning a move to or from the Washington area, I can help.  I am licensed in DC, Maryland and Virginia.   Please email me at Housepat@mac.com or call 202-549-5167. 

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Comment balloon 50 commentsPatricia Kennedy • May 02 2013 07:07AM

Comments

Is it rude to put things on the list that can be fixed with duct tape?  Hmmmm?  Or drywall screws?  Hmmmm?  Or poly foam?  Hmmmm?

That would be just about everything, I think. 

So there!  Your lists just got really short!

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 7 years ago

Hi Pat - while all sales in California are sold in "As Is" condition, this does not stop buyers from asking for repairs, credits and/or price reductions -- it becomes a second round of negotiations.  There are ways for sellers to answer this in a counter offer reinforcing the "As Is" clause.   That point aside, prioritizing "requests" is excellent advice as is eliminating those minor "WD-40" types of repair requests or those where there are renovation plans.  

Posted by Michael Jacobs, Los Angeles Pasadena 818.516.4393 over 7 years ago

Many, many home inspection notices would be a lot shorter and make a lot more sense if the buyer's agent understood and explained to the buyer the difference between a defect that is covered by the contingency and routine maintenance and/or decorating features which are not.

 

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) over 7 years ago

Great post we do have to prepare the seller's ahead of time this is the time for both buyers and seller's to work together to get the results they want happy with the transaction.

Posted by Pat Champion, Call the "CHAMPION" for all your real estate needs (Coldwell Banker Camelot Realty) over 7 years ago

Having just been both seller and buyer this past year, I can totally relate to this post.  As seller we had to deal with a potential mold in the attic situation that we spent $1000 to rectify prior to listing....wasn't good enough....buyer wanted more money taken off price because they were not satisfied it had been resolved.  Fine...we took money off just to get the deal done. 

As buyer we pretty much asked the seller for 50% of what needed to be done according to our inspector and we agreed to handle the other 50%.  The one thing I wish we had put on the seller's list was an issue with a toilet.  Our agent convinced us it was a non issue and a silly thing to request.  Turns out it was a big issue and we got stuck with it.  

Buyer's agents better be sure before they tell their client something is or isn't an issue!

Posted by Sharon Tara, New Hampshire Home Stager (Sharon Tara Transformations) over 7 years ago

Indeed the home inspection creates a 2nd negotiating process which many buyers and their agents will try to get the most out of.  If not handled properly it can turn a friendly transaction into a war zone.  Our inspections have a Summary Page that lists items that are not functioning for their intended use; don't meet code and/or safety issues.  The full report lists general maintenance items for the buyer to be aware of and plan for.  This helps somewhat.  There have been several posts on home inspections today making valid and important points and this post is certainly among them.

Sue of Robin and Sue

Posted by Robin Dampier REALTORĀ®, Hendersonville & Western NC Real Estate Source (Coldwell Banker King) over 7 years ago

Patricia, as always, the topic of inspections will continue to generate lots of feedback.  In a highly competitive market, inspections can easily kill a deal for some picky buyers.  What might be defined as a big deal to some buyers, may not even be an issue to the NEXT buyer, even if disclosed to them, in order to take over as the primary position in contract. 

Posted by Dan Hopper, Denver Broker / Author / Advocate/Short Sale (Dan Hopper - Gold Way RE) over 7 years ago

Pat, We have inspectors regularly put touch up paint and clean the gutters on their inspections. It drives me crazy.

Posted by Debbie Reynolds, C21 Platinum Properties, The Dedicated Clarksville TN Realtor-(931)320-6730 (Platinum Properties- (931)771-9070) over 7 years ago

Pat

Your right on target with the post . . . . some buyers use it to continue the negotiating process.

Good luck and success.

Lou Ludwig

Posted by Lou Ludwig, Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC (Ludwig & Associates) over 7 years ago

Seriously, Pat!  On a transaction recently, the inspector was also looking to do the repairs.  He mentioned everything including a new roof for $18,000.  In reality, the roof in the back had a small 2 foot section that needed repairs.  The buyers initial request was for something like $22K.  Really?  NOT!  It makes me angry that 1) people keep trying to get something for nothing and 2) they use so-called "inspectors" who are really contractors trying to make a quick buck.  And the $18,000 for the roof - on a 1500 sqft house - astronomical!  Get real people!

Posted by Linda K. Mayer, Realtor, SRES, SoCAL, A REALTOR YOU CAN TRUST (License # 01767321) over 7 years ago

I tell all my clients that we have to reasonable when asking for repairs.  If it's something we knew about beforehand it may not be reasonable to ask for it to be repaired unless the seller was unreasonable on the price.

Posted by Marc McMaster, Putting my clients before myself (RE/MAX Centre Realty) over 7 years ago

Pat -- your approach to the issues raised in inspections seems to be a very wise one to take.  I am sure it helps your buyers complete their purchases much more efficiently.

Posted by Steven Cook (No Longer Processing Mortgages.) over 7 years ago

Empty toilet paper holders? Really?

But seriously, when we bought our current home 16 months ago we asked the seller to install a radon mitigation system prior to closing due to an extremely high radon level in the home. After doing 3 more radon tests of their own to verify the results, the owners reluctantly agreed. But when we asked for a certain amount of money to be put into escrow so we could take care of the numerous electrical issues that were found, they flat out refused. We still bought the house, but at least we knew what we were getting into.

Buyers and sellers must realize that "negotiating" involves two parties discussing something and reaching a compromise. It doesn't mean that one side gets whatever it wants.

Posted by Janelle Ancillotti, HSR Certified Home Stager, Syracuse, NY (Seneca Home Staging) over 7 years ago

I always try to educate my client's on the repair request not being a free for all.

Posted by Frank Harper, Broker/Owner, Realtor, GRI, SFR. (Idaho Family Real Estate) over 7 years ago

Pat, Some of these request lists get crazy.  REALLY??  You want the missing screw on the lightswitch cover replaced?

Posted by Liz and Bill Spear, RE/MAX Elite Warren County OH (Cincinnati/Dayton) (RE/MAX Elite 513.520.5305 www.LizTour.com) over 7 years ago

I completely agree! I think the most confusion comes from defining what is maintenance versus a defect. I oftentimes find myself explaining that difference to the buyer.

Posted by Peggy Wester, Real Estate Agent Ozaukee & Washington County (Realty Executives Integrity) over 7 years ago

Pat,

Required versus nice to have repairs can have a huge impact on the seller's decision.

Rich

Posted by Richard Iarossi, Crofton MD Real Estate, Annapolis MD Real Estate (Coldwell Banker Residential Brokerage) over 7 years ago

Pat, I agree if you knew going in the list of defects don't renegotiate. Great blog to get the buyers rethink what they want the seller to correct.

Posted by Ritu Desai, Virginia Realtor-Fairfax/Loudoun/PW-703-625-4949 (Samson Properties) over 7 years ago

Pat...

It also depends on the price of the house. If the house is priced low BECAUSE it needs a lot of work then there should be little expectation that expensive repairs will be done.

Posted by Richard Weisser, Richard Weisser Retired Real Estate Professional (Richard Weisser Realty) over 7 years ago

I. Love. Your. List. Bullet number 5 is awesome. Love me some WD-40. Beats duct tape :) And when sellers simply say no, I find buyers proceed 9 times out of 10 anyway. It's amazing what just standing your ground gets.

Posted by Kristen Correa, Broker, I love coffee & real estate. I am out of coffee! (Kristen Correa Real Estate & Reedy Creek Realty Services) over 7 years ago

I am in complete agreement.  Major issues, and health and safety issues are what I focus on.  I tell my buyers to think about how they would look at the inspection repairs request if they were seller.  That makes sense to most people.

Posted by Adam Tarr, PC -GRI, ABR, CDPE, RSPS, ePro - Designated Broker (MavRealty) over 7 years ago

Peggy, Richard and Ritu echo my thoughts.  C'mon people, try to prioritize. $10, or $20, on a $300,000 home?

Posted by Brad MacKenzie, Turning Houses into Homes on the South Shore (Brad MacKenzie) over 7 years ago

Well said, Pat.  Not all home inspection issues are real issues.  I had one where I went in as an electrical contractor.  The folks thought the house was going to burn down the first night they slept there.  There was really nothing at all wrong with the electrical service, but the home inspector made it look like the panel had burned in the past and it was one spark away from bringing the house down.  Actually, it was dust that had collected inside the box over time. 

Posted by Mike Cooper, GRI, Your Neighborhood Real Estate Sales Pro (Cornerstone Business Group Inc) over 7 years ago

Pat, if buyers major in the minors they drive sellers nuts and the sellers tell them to go away.

Posted by Gary Woltal, Assoc. Broker Realtor SFR Dallas Ft. Worth (Keller Williams Realty) over 7 years ago
Great suggestions Pat for all Buyers to heed. Indeed if they negotiate a lower sales price, the next phase of negotiations may yield less wiggle room.
Posted by Paula McDonald, Ph.D., Granbury, TX 936-203-0279 (Beam & Branch Realty) over 7 years ago

Pat so true so true :)

Oh---also---the empty toilet paper holder should NEVER make the summary :)

Posted by Charles Buell, Seattle Home Inspector (Charles Buell Inspections Inc.) over 7 years ago

I have often coached buyers in the same way.  An inspection report is NOT a punch list.  The items that are most important to the buyers' should be addressed.

Posted by Kate McQueen, Tailored service for your real estate needs! (CB&A Realtors) over 7 years ago

Pat, when I get a buyer who, after the inspection, wants a huge laundry list completed by the sellers... I approach it from a variety of directions.  If the seller were asked to do all the items, they very well could counter that they aren't doing anything. 

I would ask my buyers how many of the items they could reasonably do themselves, or reasonably hire someone after they move in.  That boils the list down to a manageable level, and to things that may make more sense to the seller.

I also tell them that the purpose of the repairs request is not to turn the home into "the perfect home."  Such a home has never been built, and even if it had been... most buyers in this (whatever) price range could probably not have afforded it.

Negotiations of this type are best handled, in my opinion, by asking the sellers to stretch slightly... an amount they could be reasonably convinced of doing... rather than asking them to stretch so far... that no seller in their right mind would do it.

Just my thoughts.

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) over 7 years ago
Pat, Great post and excellent advice. I often cringe when we get inspection reports in.
Posted by Wayne and Jean Marie Zuhl, The Last Names You'll Ever Need in Real Estate (Samsel & Associates) over 7 years ago

Pat, great advice.  Sometimes less is more.  I would stick to the most important items and leave out all of the 'fluff'.

Posted by Lisa Friedman, 30 Years of Real Estate Experience! (Great American Dream Realty) over 7 years ago
You bring up some great points about how things can change after the inspection. I believe that a very gentle approach to anything helps to smooth over even the most difficult problem.
Posted by Melissa Zavala, Broker, Escondido Real Estate, San Diego County (Broadpoint Properties) over 7 years ago

Hi Pat, I normally get my buyers to only ask for safety and electrical items. Of course something major like a roof or foundation repair is at the top of the list, Having three pages of repair items is kind of ridiculous if you ask me. Why not go and buy a new home?

Posted by Jerry Newman, Texas REALTOR, San Antonio Military Relocation (Brown Realty, 210-789-4216,www.JeremiahNewman.com) over 7 years ago

Thanks Patricia, these are all very good points.  I've seen more than one transaction go sour because a buyer was being unreasonable with their requests.

Posted by Pam Jank, Your Coeur d'Alene & North Idaho Real Estate Pro (Coldwell Banker Schneidmiller Realty) over 7 years ago

Great ideas, Pat - home inspection repair requests can certainly bring out some interesting results. Being reasonable is key.

Posted by Jenn Morson, Licensed Referral Agent and ASP - Team Woda (Metro Referrals) over 7 years ago

I couldn't agree with you more. A rag tag list of requests  does not help a negotiation.

Posted by Paul S. Henderson, REALTORĀ®, CRS, South Puget Sound Washington Agent/Broker! (Fathom Realty Washington LLC) over 7 years ago
Very well said!!! The buyers agent should help the buyers set reasonable expectations !
Posted by Wayne Long, Homes for Sale In Fort Benning Ga (Columbus Ga Real Estate, LLC - Fort Benning - Phenix City ) over 7 years ago

Very well said. I've been on both sides of this and couldn't agree more with your thoughts here.                                  

Posted by Amanda Christiansen, Christiansen Group Realty (Christiansen Group Realty (260)704-0843) over 7 years ago

Great report! We just had an inspection with an LARGE list of things on it. We had already gotten a REALLY low price negotiated and my advice to the buyer was to insist ONLY on those repairs needed to get homeowners insurance. Fix the rest yourself down the road, let's get this wrapped up! They are doing exactly as I suggested.

Posted by Barbara-Jo Roberts Berberi, MA, PSA, TRC - Greater Clearwater Florida Residential Real Estate Professional, Palm Harbor, Dunedin, Clearwater, Safety Harbor (Charles Rutenberg Realty) over 7 years ago

I consider it to be rude to put anything on the punch list that can be fixed with a bottle of WD-40. 

I agree...if the sellers did not have a PRE-listing inspection, shame on them; however, buyers need to realize the house has been LIVE IN

Posted by Wallace S. Gibson, CPM, LandlordWhisperer (Gibson Management Group, Ltd.) over 7 years ago

This is a great list. I may have to quote you on a few concepts when educating my clients on my next deal. With your permission of course. =) I love the list, and it makes perfect sense. 

Posted by Janis Borgueta, LIC RE Salesperson (Key Properties of the Hudson Valley ) over 7 years ago

My advice to buyers is always to focus on the major repairs (roof, foundation, etc) and skip little stuff (leaky toilet, etc).  Chasing a $100 repair on a $500K home is just silly.

Posted by Bryan Robertson over 7 years ago

Wonderful tips for any buyer looking for a smooth closing! Hope you have a great weekend.

Posted by Larry Atkins (State Wide Realty Co.) over 7 years ago

We had a Sale fall through recently...  the Buyers asked for every rinky-dink thing on the Inspection Report, even though the MLS Listing read, "As-Is, Subject to Inspections".   The Seller refused to talk with them; house went Back on Market.

Posted by Fred Griffin Tallahassee Real Estate, Licensed Florida Real Estate Broker (Fred Griffin Real Estate) over 7 years ago

I just had someone ask to have the electrical panel replace among other nit-picky items.  Basically they "copied and pasted" from the report and hit send.  Needless to say they did not end up purchasing the property and now, a week later, we have a new signed PA on the same house with new buyers for more money.

Posted by Julie Brown, Broker-Associate, Mt. Pleasant, Iowa (Steffes Group, Inc.) over 7 years ago

Pat:  I am really curious as to just why some of these buyers mentioned in the comments have not had any sense talked into them.  I have had buyers in the past who wanted to copy and paste the inspection report onto a request for seller's repairs, but after going round-and-round with them... I was able to get them to change their minds to a pretty drastic degree... and see the folly of doing something so counter productive.

Being a buyer's agent does not only have to do with "closing the seller" on the buyer's requests... but also on "closing the buyer" and having them see the wisdom of certain ways of negotiating over others.

So... if buyers do goofy things like this... I do not only lay the fault at their feet, but also at the feet of their own buyer's agents.

It has almost always produced good results, and eventually results that the buyers were very satisfied with.  Obviously, it works best if the buyers really, really want the house, or are just toying with that seller.  Motivation is key.

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) over 7 years ago

This is good advice for home buyers. I will reblog this next week.  I am posting it on Facebook today.

Posted by Roy Kelley (Realty Group Referrals) over 7 years ago

Pat, great post, and very good information for buyer's agents!     In our seller's market, not much is getting approved, and deals are going thru without repairs.

Posted by Joan Cox, Denver Real Estate - Selling One Home at a Time (House to Home, Inc. - Denver Real Estate - 720-231-6373) over 7 years ago

my biggest statement to buyers is to factor it in ahead of time, aside from termites and mold that the seller will have to remediate regarless in most cases, would they prefer to fix an item or have the seller perform the cheapest fastest fix on an item?

Posted by Mark Loewenberg, KW 561-214-0370 (KW of the Palm Beaches) over 7 years ago

Mark... that is an excellent come-back... and unfortunately, it is very much the truth.  I have seen too many times when the seller "fixed" something, then the buyer looked at it to accept it, and it was a really "sorry" job.

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) over 7 years ago

Manyy sales are lost at home inspections. It sometimes starts another entire set of negotiations. There is an art to being able to negotiate the inspection requests and repairs.

Posted by Margaret Rome Baltimore 410-530-2400, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) over 7 years ago

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