Successfully Negotiating Your Home Inspection Response

How to successfully negotiate your home inspection response for both buyers and sellers

Whether you’re a home buyer or home seller, the process of scheduling, conducting and most importantly, negotiating the home inspection response is often times the most memorable part of any real estate transaction.

 

Interestingly enough, when it comes to conducting a home inspection, there are those who believe a home inspection is a PASS or FAIL process! Really…that is not the case at all.

Interestingly enough, when it comes to conducting a home inspection, there are those who believe a home inspection is a PASS or FAIL process! Really...that is not the case at all.Click To Tweet

 

Some may also view the home inspection response as a way to negotiate a lower price in lieu of work to be done…this too is not the real purpose of this vital step in the home buying (and selling) process.

In actuality, the home inspection process is essentially the home buyers opportunity to conduct an assessment of the property for the purpose of their use.

 

Some home buyers may be buying the home AS-IS and will conduct a home inspection only to determine if all the major systems are within their ‘comfort zone’ since they may be planning on doing a gob of work anyway.

Others want the home inspection to be about what they need to know from a deferred maintenance standpoint. They know the home may need some work…they just don’t want any surprises!

Then there are home buyers who need to know the home is in the kind of condition that allows them quiet enjoyment with little to no need for work on their part.

 

Whatever your reason for conducting a home inspection, depending on the markets condition…not to mention the homes condition, the home inspection response should be crafted with diligence and the intent to identify and remedy issues found in the home.

The intention of this post is to outline what you should expect and lastly, what you should negotiate as a home buyer and a home seller to insure the deal does not get nasty or worse…fall apart.

 

The Home Inspection Response – CONTINGENCY PERIOD

 

In my humble opinion, every home buyer MUST have their potential home inspected! It’s both pragmatic and safe.

Even in the case of a very hot market where home buyers will waive their inspection contingency in order to curry favor with the seller and their offer…you still should do what you can to make sure the major systems are in good working order.

In the case of a surging sellers market or entering a bidding war where parties are waiving the home inspection in order to “win” the bid, make sure to conduct a pre-inspection.

A pre-inspection is a home inspection done before writing a purchase and sale.  This ensures that you are not jumping into anything blindly and allows you to waive the home inspection contingency.

That said, market conditions aside, the S.O.P (Standard Operating Procedure) for most home buyers is to attach a Home Inspection Contingency to their Purchase and Sale Agreement.

This opportunity, known as the inspection contingency period, is established for the home buyer to have a specified time period, generally 10 days unless otherwise agreed upon, in which they can conduct their overall assessment of the condition of the property. This contingency period does not preclude a home buyer from conducting additional inspections on systems such as sewer or septic, inspection of a Well and even termite or other pest inspections the home buyer wishes to have done. Matter of fact, most properties serviced by a Septic or Well require an inspection of those systems…check with your real estate broker for more information on that.

 

Often times, a home buyer will rely on their Broker to refer a home inspector for this task. 

 

This can be a good thing and maybe a bad thing. Most Brokerages in the State of Washington require their Associate and Managing Brokers attach an Inspector Referral Disclosure which complies with WAC 308-124C-125*.

Simply put, Washington State law requires that a real estate broker, who refers a home inspector to a buyer or seller with whom the broker has a current or past relationship including, but not limited to, a business or familial relationship, fully disclose in writing to the buyer or seller the nature of that relationship. A home buyer should ask their real estate broker to provide them with this form (NWMLS 41D)

All that aside, hiring a home inspector is really just the first step in this process. The next step is to schedule the home inspection. Most home inspections will take several hours depending on the size and scope of the home inspection.

During your contingency period, you will have time to attend the home inspection along with your real estate broker (it’s required that they or a licensee from their Brokerage be there during the entire home inspection), go over the report with your home inspector and finally lay out a strategic plan with your real estate broker, the home inspection response for the sellers.

 

Successfully Negotiating the Home Inspection Response – HOME BUYER

 

This could be one of the more stress filled parts of the home buying process and honestly, where most real estate deals go ‘off the rails’ so to speak.

Gathering your thoughts (and emotions) as a home buyer and determining what is and what isn’t a ‘must fix’ item can be intense. After all, this is likely your largest financial investment you’re ever going to make so you want to be sure you get this right!

With the assistance of your real estate broker (hopefully), you begin the process of going through your checklist of what you want the seller to attend to.

 

Step One – Are all the major systems in good working order

 

As mentioned earlier, this may vary from buyer to buyer but this is the time you need to determine the overall longevity of the heart and soul of the house. I’d categorize the major systems as:

  1. Roof
  2. Heating
  3. Electrical
  4. Plumbing
  5. Siding

These are your ‘Big Ticket’ items and may or may not fall in the budget of a seller to fix. Some home buyers may consider any of these as ‘Deal Killers’ if the home seller are not willing or able to remedy.

 

NOTE: This post is in no way advocating how to proceed with negotiating your home inspection response…just my thoughts after 20 years of selling houses.

Step Two – What to Ask for and What NOT to ask for in your home inspection response

 

As the home buyer goes through the inspection report, some may feel the need to ask the home seller for everything and the kitchen sink. Bear in mind, no house is perfect and no home buyer should expect such. That said, focusing only on the things that logically should be remedied by the home seller will greatly reduce the likelihood of a negative reaction from the home seller.

 

At this point, the buyer has 4 options for request for repairs or modifications.

  1. Buyer inspection of the property is approved and the inspection contingency is satisfied
  2. Buyer inspection of the property is disapproved and the Agreement is terminated
  3. Buyer gives notice of an additional inspection. The buyer would need to attach the inspectors recommendations for any additional inspection
  4. Buyer requests the following modifications and/or repairs

 

What to consider asking for :

  • Any indication from the home inspector that things like the water heater or furnace appearing to be at the end of it’s designated lifespan should be high on your request list. The home buyer should feel confident to ask the home seller to repair or replace these items.
  • This also goes for vital systems that have known hazard issues or a history of reported failure. A few examples would be Zinsco & Zinsco-Sylvania Electrical Panels and Cadet wall heaters.
  • Any area of the house that requires GFCI (Ground Fault Circuit Interrupter) such as the kitchen, bathroom and outside deck are also easy requests for remedy.
  • Repair or replace a damaged or leaning fence is also a fairly safe request.
  • Essentially anything that might be a hazard or pose a risk to the overall quiet enjoyment of you and your new home.

 

What to consider NOT asking for:

  • Asking a home seller to replace an appliance will more than likely get you a big fat NO. That said, ask your real estate broker about purchasing a home warranty that may cover appliances in the event one decides to go on the fritz right after closing.
    • We generally recommend using:  American Home Sheild
    • If you are in the market for a home warranty our friends at Review.com did a review of the top 61 home warranty brands that you can view here:  https://www.reviews.com/home-warranty/
  • Being overly critical of things like small or easily fixed issues with the house that don’t directly pose a hazard or risk to the overall quiet enjoyment of you and your new home.
    • (Small) Holes or dings in the wall
    • Removing unwanted items unless of course we are talking about an old car in the backyard or a transmission in the bathtub
    • Fixing small scratches or squeaks in hardwood floors
    • Making any request for removal of outside items like sheds or outbuildings

 

Successfully Negotiating the Home Inspection Response – HOME SELLER

 

Now that the home buyers request(s) for repairs or modifications has been submitted to the home seller, it’s their turn to respond.

 

At this point, the home seller has 4 options in response to buyers request for repairs or modifications.

  1. Seller agrees to all of the modifications or repairs in buyers request
  2. Seller offers to correct only the following conditions
  3. Seller rejects all proposals  by buyer
  4. Seller rejects all proposals by buyer, but proposes the following alternative modification or repairs

What to consider saying YES to:

This is often where ‘Feathers may get ruffled” in the transaction. Most home owners have lived quite comfortably in their house for many years thank you very much (insert snarky tone here). And to have a complete stranger come in and demand request this and that be fixed can be met with some resistance. Every home seller should detach themselves from the emotional side of the home and look at this pragmatically. Eyeing the bigger picture of selling the home and moving on should be the priority here!

  • Essentially, anything that is of a mechanical or environmental hazard or poses a risk to the overall enjoyment of the new owner.
  • An item that might potentially be called by the appraiser as needing to be addressed as a condition of the loan – CASE IN POINT: I represented a home buyer who was very concerned about a tree that was leaning dangerously close to the home. We asked the seller to have it removed but they refused. So, I asked the lender to make the appraiser ‘aware’ of the tree. The appraiser subsequently saw the tree as an issue and put in their appraisal that the tree was to be removed prior to closing. VIOLA, seller complied and bye-bye tree!
  • Having the septic pumped and inspected or having the oil tank decommissioned if the home is heated by a source other than oil. In most cases, these MUST be done as a condition of the lender funding the transaction.

What to consider saying NO to:

Certainly, some items may be added to the home inspection response that can easily be dismissed by the home seller. As mentioned earlier in this post, some home buyers may feel the need to ask for too much!

  • Aesthetic issues such as scratches, dings or mars to walls or floors
  • dripping faucets, squeaky floor boards, uneven (or cracked) outside walkways and even repairing minor cracks in the basement and garage (cement) floor
  • Landscaping or exterior issues such as over hanging shrubs or trees

Now the sellers response is sent back to the buyer for their reply

At this point, the buyer has 3 options to reply to sellers response.

  • Buyer accepts seller response and agrees to proceed to closing as provided in the agreement.
  • Buyer rejects sellers response. This constitutes the buyers disapproval of the inspection and the agreement is terminated.
  • Buyer rejects sellers response BUT offer the attached alternative proposal for modifications or repairs.  Honestly, if the buyers elect this route, they are usually looking for a financial consideration in the way of a new price or other acceptable terms that will give them a reason to waive the inspection contingency and proceed to closing.

 

IT’S EXTREMELY IMPORTANT TO REMEMBER THERE IS A TIME PERIOD AND SUBSEQUENT DEADLINE IN ALL THIS! EVERYTHING OUTLINED ABOVE, FROM BUYERS REQUEST TO SELLER RESPONSE MUST BE PREFORMED IN THAT DESIGNATED TIME PERIOD.

See NWMLS Form 35: line items 29-30 as well as line items 54-58 or ask your real estate broker for details.

 

In summary

 

The home inspection response is something that is to be taken very seriously! This is the home buyers one chance to make sure their largest investment will give them the quiet enjoyment they want.

It’s also vital the home seller be diligent in remedying any major items or issues BECAUSE…these home buyers may decide to go away, BUT THE PROBLEMS IDENTIFIED WILL NOT!

It also bears noting, home buyers should ALWAYS ask their real estate broker to take the time to answer any questions or concerns they have about both the home inspection process as well as the verbiage on the NWMLS forms 35 Inspection Addendum and the NWMLS form 35R Inspection Response to form 35!

 

*If a licensee refers a home inspector to a buyer or seller with whom they have or have had a relationship including, but not limited to, a business or familial relationship, then full disclosure of the relations must be provided in writing prior to the buyer or seller using the services of the home inspector.
About the Author

Jason Fox

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Jason Fox is a father, a real estate broker, a marketing specialist, and a friend. Being born and raised in the Pacific Northwest he has a unique and interesting perspective on local real estate that he can't wait to share with you. Jason lives in the Meadowdale neighborhood and hopes to see you out walking, at the park, at the movies, on a trail, on Stevens Pass, on the beach, at a lake, at a Seahawks or Mariners game, or just commenting on the blog.

26 Comments on “Successfully Negotiating Your Home Inspection Response”

  1. What inspections are required in Whatcom county as part of a sale? Examples are, furnace, fireplace/chimney, rodent etc.

    1. No inspections are required. As part of your buyer rights you have the ability to submit a form 35 and request an inspection. That would make the sale of the home contingent on you accepting the inspection results, or making a counter offer. You are responsible for hiring the home inspector and should ask what items will be included in the home inspection. Usually, a general inspecting of all items you mentioned are covered.

  2. Hello, we are in the process of purchasing a home and the seller has responded with the option to suggest an alternative option to our repairs request, they say we reject your requests, we want 6k more for the home and will do all things listed on 8/16. We have not signed yet and they have set to work supposedly on these repairs. We would like an option to respond and say we will take the house as is then but will not pay more than the agreed upon price in our contract. Our best idea so far has been simply to not respond. Any help would be very much appreciated!

    1. Chelsea, I hope that your agent is well schooled in real estate negotiations. Once you asked for repairs you essentially went out of contract. The seller is not required to do anything. If they want to walk away they should send you a recission form and you should be able to get your earnest money back. You also have the option of walking away if you can not come to an agreement. Please call if you need more help with this: 425.299.8454

  3. Great points to be learnt before buying the home. I was curious to know the result of the tree that was leaning towards home. That was a great point to be noted. Thank you for sharing.

  4. Great and timely information here. The home inspection on a home my sister is trying to buy was conducted yesterday, and discusses her response with her realtor tomorrow.

    Issues include one major concern (a half inch crack in the foundation that is a result of movement); evidence of erosion around one side of the house that can effect the foundation and should be backfilled; several potential safety hazards, to include disconnected/misaligned gutter downspouts under the deck which have allowed erosion in the vicinity of the support footings and could potentially cause the deck and sunroom to fail; four electrical potential hazards, and the deck not being up to code (lacks horizontal rails for child protection).

    Any suggestions on prioritization of what to ask to be fixed? She’s going for a FHA loan, which requires the home to be safe, sound and secure to qualify for the loan. In my book, this house is missing safe and sound and if these issues are not fixed by qualified professionals, it is a situation in which she should walk away.

    Thanks!

    1. Hello Leisa, without being a part of the inspection and having first hand knowledge of the home, the agents involved and the transaction… it would not be fair for me to weigh in on this.

      When the FHA appraiser comes to appraise the home they will call out any major defects that they deem would make the home unsafe.

      I am sure that your sister choose a strong Realtor that will negotiate a positive outcome for her.

  5. This article is great for preparing for a home inspection. It’s good to have a list of what you should or should not ask about during the inspection process. Next time I need a home inspection done, I’ll be sure to follow these guidelines.

  6. I like how the article explains that you should make sure to have your potential home inspected to make sure that major systems are in good working order before you buy the home. My husband and I are looking to buy a home but we don’t want to buy one that we will have to fix a lot of things such as getting the electrical systems fixed. We will make sure to have potential homes inspected before we buy them.

  7. If the home inspection revealed that the refrigerator, stove and dishwasher were all defective and not operating what would you recommend to you client buying the house to request of the seller? I could understand one appliance, but not all three. Additionally, all appliances look original to the 1979 kitchen

    1. Hello Allen, each real estate deal has so many variables and each one is a little different. It would be easy for me to say that you should ask for all the appliances to be replaced, but honestly it depends. Did you get a good overall price, do you love the house, was it a competitive bidding process? Are you asking for closing costs, what position are the sellers in? I could go on and on with different variables that effect your position. I guess the bottom line is… what does your agent advise and what does your gut tell you and what are you comfortable with?

  8. I am a recent homebuyer in Asheville,NC. One element the home inspector designated for repair was to properly connect with a Fernco coupler ,where none existed before , two incompatible sections of 6″ plumbing pipes in the garage area.
    The work was done by a contractor recommended by my realtor incorrectly. He simply cut the rubber coupler and wrapped around area rather than detaching sections and sliding on coupler, and screwing the two metal clamps .Now my realtor does not respond to my two follow up e-mails I sent inquiring as to whether she had implemented with this contractor to correct work, as she said she would . What recourse do I have,if any ?

    I feel I have the right to have this work done correctly .
    Many thanks

  9. I like how you mentioned that home inspections can help determine the longevity of a home. One of my friends mentioned that he’d like to buy a home. Thanks for pointing out the benefits of getting a home inspection and how to go about it.

  10. I have a question… We are selling our home, the buyers had an inspection and submitted a form 35R. Their inspector was an idiot (sorry, but if you don’t know how to light a pilot light and say the fireplace has a ‘gas leak’ you should not an inspector) so we submitted a rebuttal. Their agent told our agent (in an email) that the buyers were most likely not going to accept our rebuttal so we got some professional opinions and decided to agree to the buyer’s original request for repairs and signed their original 35R they sent us within that three day time frame. They are now trying to back out of the deal (after all repairs were done, and some were electrical so it was costly) and said they had they can back out because they had a three day period to respond to our rebuttal but we signed their original request five days prior to them ‘backing out’ and they are just now notifying us that they are backing out? There was nothing for them to sign as we signed their original request for repairs. I can’t find anything anywhere saying that because we submitted a rebuttal, it made their original request void. Are they entitled to get their earnest money back?

    1. Hello Lindsey…. giving real estate advice from second hand information is dangerous. I can tell you that from what you described in your comment that both you and buyer satisfied the inspection contingency and that should not be a means to cancel the deal. I would suggest that you talk with your agents managing broker for more clarification.

  11. Great article! I was amazed by your blog, your writing is wonderful goes with the topic that is educational and useful for everyone’s resource. Thanks for sharing this!

  12. Keep up writing more in the future! sharing these awesome tips is a great way helping other people to be educated regarding this matter, Thanks to you for this much informatic and useful article.

  13. This is very helpful information. I’m in the process of purchasing a home and on the inspection report, inspector comments the main electrical service panel contained some circuit breakers manufactured by Zinsco. Zinsco breakers are known to have a high rate of trip failure when exposed to overheating. Is it best that i hire an electrician to evaluate? Or is this something i can ask the seller to do? Trying to find the best route about this.

    1. Hi Vanessa, either option is viable. It is also a possible that you buy it as is. It really varies on each transaction. What do you want? Your agent should be guiding you through this delicate process, something I can not do with limited information.

  14. It was a great learning. Buying a home is a dream event and we definitely wish to have a peaceful purchasing and home inspection is truly helpful in this matter. Thank you for the great advise.

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