How to negotiate after a home inspection

What is a home inspection?

A home inspection is a visual evaluation of a home’s physical condition. It’s most commonly used to give buyers the opportunity to uncover safety concerns, structural issues and other defects in a home before finalizing the purchase.

Home inspectors typically inspect the home’s major systems and components, like its structure, roof, floor, plumbing, HVAC and electrical system. A home inspection aims to identify issues you can’t easily detect that might cost you money in the long run.

When hiring a home inspector, make sure you understand the inspector’s qualifications, what’s included in the inspection and how long the inspection will take. It’s essential that the home inspector is knowledgeable and can provide the inspection in the time frame you need.

What repairs do sellers have to make after a home inspection?

Sellers usually don’t have to make mandatory repairs after a home inspection. However, real estate laws vary by state. Check with your real estate agent, title company or real estate attorney early in the process regarding your state’s requirements. Also, your lender or insurance agent may require proof that significant repairs are completed before the transaction closes.

In many states, U.S. real estate law puts the responsibility on the buyer to learn about the property’s condition before purchasing it. That means you should get a home inspection so you’re aware of things that need to be repaired — but it may not result in any contract changes.

Your real estate agent can help you decide what repairs to request or make before closing.

Your real estate agent should be knowledgeable about your state’s laws and able to inform you about what repairs, if any, are required. Also, remember that while your state’s laws might not require repairs after a home inspection, your insurance agent or lender might require repairs before closing.

Mike Powell, owner of Red Flag Home Inspection, a company in the Tampa Bay area, explained: “Some defects identified during the inspection process must be repaired prior to closing to secure insurance and bind the loan. These are typically the public health and safety items and the ‘4-point’ items. The 4-point items are electrical, plumbing, HVAC and roof. If these items are not inspected, as we see in Florida, the insurance company will not write the policy.”

Besides speaking with your real estate agent about your state’s laws, speak with your lender and insurance agent to confirm what repairs they require. You should have these conversations before the inspection is even ordered so you don’t have any surprises when it comes time to close the transaction.

What repairs should I ask for after a home inspection?

There is no legal guidance about repairs you should ask for after you get a home inspection. However, buyers commonly request repairs for things like mold, foundation issues, roof leaks, electrical issues, plumbing problems, termites and pests, asbestos, and issues that present a health or safety concern.

It’s common to ask for repairs for issues that present health or safety concerns.

Jeremy Henley of TheQwikFix, which connects buyers and sellers with contractors after inspections, suggested buyers prioritize the repairs they find the most important that the seller is likely to make. Your purchase offer should’ve been based on what you knew about the home’s condition at the time. So, your negotiations after getting a home inspection should be based on your new knowledge.

“Once the inspection is complete, any new and costly repairs are what should really be part of the negotiation,” Henley said. “If the home is older, you should know going in that it is unlikely all the systems around the home will be up to today’s code standards. If that is important to you, ask before making your offer so you can make the best offer possible.”

Even if you don’t ask for any repairs, said Joshua Massieh, CEO of Pacwest Funding and Iconic Ventures Real Estate Group, “it’s important to take advantage of all a thorough inspection has to offer and ensure you’re fully informed before taking the plunge into homeownership.”

Negotiating after a home inspection

If you’re ready to negotiate after getting a home inspection, follow these steps.

Who pays for the repairs after a home inspection?

Ideally, the seller pays for repairs after a home inspection and before closing. Ideally, the seller pays for the repairs and has them completed in a manner you both agree to (e.g., by a licensed contractor). However, the seller might give you a repair allowance or price reduction so you can perform the repairs after you move in.

In some cases, you might decide the purchase price accurately reflects the home's condition and pay for the repairs on your own. You might also decide not to make the suggested repairs at all. For example, there might be a cosmetic issue that comes up in the inspection and doesn’t bother you. In this case, nobody has to pay for repairs.

Bottom line

A home inspection allows the buyer to find potential issues with a home before closing on the transaction. Assuming the purchase contract includes a home inspection contingency, the buyer can negotiate with the seller to make repairs to the home, get a repair allowance or reduce the purchase price.

Before you begin the negotiation process, review the home inspection report and put together a list of repairs by order of importance. For defects already factored into the price of the home, you may not want to ask the seller for any contract changes.

Both parties have an interest in reaching an agreement. Your negotiations are more likely to succeed if you request repairs you can reasonably expect the seller to make (e.g., fixing a running toilet versus replacing the whole plumbing system). By striving to make the situation beneficial for everyone involved, you’ll arrive at a better all-around solution.