Oct. 24, 2010
This is a further detail on an earlier post, written HERE.
As a seller, what should you do when the home inspection negotiation starts? Well, the first thing you should do is make sure there's a little left over in your negotiating budget for repairs. While not always possible, if you can that's a good step. Fundamentally, most home inspection negotiations are about money. Buyers are looking to spend less when they move in, and you're trying to keep more when you move out. A home inspector may find a whole range of deficiencies in your home, but your job is to try to keep the buyer engaged (if not necessarily happy) and keep the deal together.
A) Title V. This is a big one. It doesn't apply if you are on town sewer, of course. You should always have your certificate before listing your home, except in rare instances. Even new systems can have problems, and due to the amount of money involved in fixing them (not to mention the visual hit you'll take for digging up your lawn), make sure you've got a clean report.
B) Have a Radon test. If you don't have a mitigation system, and haven't recently tested your home, you should. Radon results typically don't show up until after the rest of the inspection is done. If you have a high count, you may just want to install it anyway, and take it out of the mix of problems you'll need to deal with later. As a safety issue, Radon mitigation is almost always required, and it's very difficult to negotiate it away.
C) Have your heating unit serviced. If you haven't, you will be asked to almost certainly. Make sure it is inspected and any "necessary" or "soon will be necessary" repairs are at least discussed, if not fixed. Heat is important in New England, and buyers take it seriously.
D) Make sure your roof is good.
E) Make sure anything that vents, vents outside, and not in a basement, crawl space, or the attic. These include bathroom vents, dryer vents, range vents, and virtually any other type of appliance that produces moisture or exhaust from burning or heating. If these items are vented improperly, it is likely that you'll have mold in the cavity that is being vented into, and that should be fixed as well.
Generally, doing these items beforehand gives you the opportunity to price shop contractors, to wait a bit on their schedule, as opposed to be pressed for time and needing it right away, which will likely cost you more, and may affect the availability of the contractors you can choose from.
Each item in the inspection basically has three options:
B) Pay the buyer to do it
C) Seller pays a contractor to fix it.
There are no hard and fast rules here. Basically, you want to try to address the buyers concerns (AS THE BUYER SEES THEM) from most serious to least serious in some fashion. Deal with the deal-breakers, in other words. If you have access to contractors (a friend who is an electrician), target any electrical items as ones you'll fix. If there are items that you aren't comfortable with, try to negotiate them out or buy out the buyer to do it themselves. In general, I advise to not have contractors come out and offer opinions as to what it will cost to "fix" something. The reason is because there's almost always three ways to fix something for a home.
- Return it to working order
- Replace the defect and return it to working order
- Improve the situation/cause and reconstruct the solution so that it will function properly for years.
Most contractors that come out on behalf of the buyer will start talking about the "right" way to fix whatever is wrong (which is number 3), and #3 is always a LOT more expensive. I want to point out here that there's no right or wrong with any of the solutions. 1, 2, and 3 can make sense given the situation. Here's an example.
Let's say you've got a retaining wall on your property that is in disrepair, and holds up some earth that supports your foundation (so it's important!). You could: 1) Pour footings to hold up the wall. Structurally sound, cheap, but ugly. 2) Repair the wall (which could last 10 years) 3) Tear down the wall, and rebuild with modern retaining wall technology to support the house properly for the next generation or more. Obviously, 3 is more, and really, the house should be worth more if you've done all that work. You can see where a contractor would suggest that as the best solution, but now it's become an issue large enough to affect your budget, and the offer's ability to succeed. So, try to work out the issue with approximation numbers where possible if you're on the sell side.
