The home inspection is a critical component in your due diligence once you have found your ideal retirement home. But what if the home inspection report indicates that there are some important repair items? How do you respond and what demands would you make of the seller?
The process of buying a home goes like this. First, you make an offer on a home. In your offer, you’ll have the main Purchase & Sale Agreement, plus you’ll have addendums. The addendums will typically include a Financing Addendum, unless you’re paying in cash without a loan, a Well Inspection, if there is a private well, and a Septic Addendum, if the home is not on a public or community sewer system, and among other possible addendums, you’ll have a Home Inspection Addendum. [If you’d like to know more about the home inspection, read my series of articles on Sequim Home Inspections.]
The Home Inspection is Vital
Second, once you have mutual acceptance with the seller, you step into the due diligence phase. This is where you have an opportunity to do research and find out if there are any problems with the home. Let me interject here that if you are a buyer from outside the Sequim or Port Angeles area, you need a Sequim Buyer’s Agent who will step into your shoes and be your boots on the ground, attending the inspections, and following up on the necessary steps within the contractual deadlines on your behalf. This is another reason I do not recommend that you hire the listing agent, who is working for the seller and motivated to get the transaction closed. That’s why I often refer to your “buyer’s agent.”
The Home Inspection Complete
Third, when your home inspector has give you his written home inspection report, you have an opportunity to ask the seller to repair items or reduce the price. This is where you have to be careful. This is also where some buyers (and some sellers) make a serious mistake.
Imagine negotiating to buy a home, and imagine that you’ve gotten the seller to come down by $30,000 from his listing price. As a buyer you’ve accomplished something great already, and you’ve beaten up on the seller pretty bad. But this is America, and that’s how negotiating in a free enterprise system works. But here’s where a buyer can take a major misstep and put the entire transaction at risk.
If the home inspection report shows that there are several hundred dollars (or even a couple of thousand dollars) in repairs needed, it is not necessarily wise to demand that the seller fix those items. Of course, you could also demand that the seller just reduce the price, but that may not be wise either. What buyers often don’t realize is that they may already have pushed the seller as far as the seller is emotionally or psychologically willing to go. The seller feels he took a whipping when he reluctantly agreed to the buyer’s counteroffer to his counteroffer, and the seller often feels they sold for far less than they wanted and far less than they deserve. At this stage of the transaction, the seller is often feeling that their back is up against the wall, and they are very defensive when it comes to any more demands. If the buyer demands the seller fix something for a few hundred dollars, the seller is often offended and many sellers have told their real estate agent, “I’ll be darned if the buyer is going to nickel and dime me to death! I already came down $30,000 on my price. I’m not going down any further.”
I have seen buyers and sellers walk away from the transaction over a few hundred dollars because it was a “matter of principle” for both parties. Do not let your retirement dream turn into a bitter fight over a few hundred dollars (or even a few thousand dollars) when you already negotiated the price downward by tens of thousands of dollars. Handling the Home Inspection and the Form 35R Inspection Response is one of the last but most important steps in your due diligence.
Possibly Related Posts:
- Terminating Based on the Home Inspection
- Buying an Older Home
- How Much Due Diligence Can I Do Before I Submit An Offer?
- The Home Inspection Report Response
- Home Defects Haunt Buyers