Guidelines for negotiating property defects
Learn which problems a seller must fix!
Learn which problems a seller must fix!
Home inspectors can provide guidelines and perspectives in answer to most questions, but most essential at this stage of the transaction is representation by an agent or broker with strong negotiating skills and a sense of commitment to your financial interests. ,p>The first point every buyer must understand is that home inspection reports are not repair lists for sellers. The one exception to this rule applies to brand-new homes, where the builder or contractor must provide a finished product free of defects. With used homes, inspection reports provide information for buyers, rather than directives for sellers. This does not mean that buyers cannot submit repair requests to sellers, but most such requests are negotiable, not legally binding upon the sellers. Repair requests can and should be made, but with the understanding that most sellers have rights of refusal.
With this ground rule in place, buyers should divide the inspection findings into four distinct categories:
Legally mandated repairs: Some conditions require repairs in accordance with state laws or local ordinances. Common in many areas are requirements to provide water conserving toilets and showerheads, to upgrade smoke detector placement, to strap water heaters in areas prone to earthquakes, or to comply with various building and safety standards. Such items are obviously non-negotiable and must be addressed by the sellers.
Contractually mandated repairs: Some conditions are specified for repair in the real estate purchase contract. Common in this regard are stipulations that all building components be in working condition, that broken windows be replaced, that plumbing leaks be repaired, or that the roof be certified by a licensed roofing contractor. Contractual agreements of this kind are binding upon sellers.
Negotiable repairs: All property defect not included in items 1 and 2 above are negotiable, and buyers should carefully divide these according to importance. Vital repairs, such as structural problems or safety violations, although not incumbent upon sellers, are generally regarded as reasonable repair requests. Although sellers are not obligated for such corrective work, most reasonable sellers will agree to address conditions of this kind, either by making repairs or by adjusting the sales price of the property. Examples of such conditions include faulty foundations, a non-permitted addition, a defective furnace, a substandard chimney, and faulty electrical wiring. Although sellers are not required to make these repairs, buyers should feel comfortable requesting that such corrections be completed.
Conditions of minor concern: Finally, there are those common property defects which should be regarded for disclosure purposes only and which buyers should accept as conditions to be repaired after the sale. Examples are numerous and include rotted fence posts, peeling paint, rubbing doors, cracked pavement, worn carpet, obsolete appliances, etc.
These four standards should be applied when reviewing an inspection report, as a means of separating repairs to be requested from conditions to be accepted. At this point, the buyers and their agent typically formulate a letter of request for the sellers.
A wise approach for structuring this letter is to state that some defects will be accepted in "as is" condition. Listing the items to be accepted is a good strategy for negotiation, because enumerating the accepted defects demonstrates a willingness to be reasonable, rather than demanding. The letter should then list the items for which repairs are requested, beginning with conditions required by law or by contract and concluding with the items that are subject to the sellers' approval.