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Reuben Saltzman

Negotiations after the inspection

Negotiations often take place after a home inspection, and the home inspector frequently gets put in the middle of it. The role of a home inspector is never to decide what should or shouldn’t be negotiated as part of a home purchase, assuming anything gets negotiated. That’s a job for the real estate agent. Today, I’m re-blogging about negotiations after the inspection. I did a three-part series on this many years ago, but I’ve combined those three into a single post, and I’ve compiled this information into a downloadable pdf at the bottom of this post.

My vision is for real estate agents to use this document as a guide to negotiations after the inspection. If you agree with this post, please share it. If you don’t, please leave a comment. Thank you!

Part 1: The Basics

Report not a club coverBefore a home buyer even has a home inspection, it’s important to know what the home inspection is all about. A home buyer hires a home inspector to learn about the home, and the inspection report is the document that the buyer is left with, detailing the results of the inspection. The inspection report is not a repair list for the seller, nor is it a stick to beat the seller with on price. Most home inspection reports will have a large list of recommendations, typically for improvements, repairs, and safety upgrades. This is normal for a used house.

Issues that come up during a home inspection may be negotiable, but there are no hard and fast rules about repairs that sellers need to complete as a result of a home inspection. In fact, here in Minnesota where home inspections are not regulated, there are no rules at all. When a home inspector finds defects during a home inspection, there are four choices for a buyer:

Renegotiate the price

With this option, the buyer can hire their own professionals to do the work, and they can oversee the whole project after they own the house. This is a common approach, but it’ s not always a practical approach because it doesn’t leave the new home buyers with any cash to pay for repairs.

Cancel the purchase agreement

This typically happens when the buyer decides there are too many issues with the house, or the issues are greater than what the buyer wants to deal with or when buyers and sellers can’t come to an agreement.

Ask the seller to perform repairs

When asking a seller to perform repairs, it’s important to be specific. Say exactly what should be done, by whom, permits pulled, inspected, and approved, when the work should be completed by, and documentation provided to the buyer by a certain date.

Do nothing

This is often the best option for buyers. When buying a used home, buyers shouldn’t expect things to be perfect, because they never are. Walls get damaged, showers leak, appliances fail without notice. This doesn’t mean buyers shouldn’t address defects after they’ve bought the house, but it’s unrealistic to expect sellers of used houses to fix every little defect. Asking sellers to address a long list of minor repairs will make the seller feel defensive about their home and make the buyers look petty.

Part 2: Stuff that shouldn’t be negotiated

We at Structure Tech are not real estate agents nor attorneys, so this is not real estate advice or legal advice. These are our opinions. We don’t share these opinions on negotiations during home inspections, nor do we share them in our inspection reports. This is completely outside the realm of a home inspection, and honestly, it’s outside the realm of our area of expertise. Nevertheless, we certainly have opinions about this stuff. The following is a list of things that we generally feel should not be negotiation items as a result of a home inspection.

Known conditions = no negotiations

No price or repair negotiations should take place regarding conditions that were known prior to the home inspection. If a condition is readily visible or apparent, it’s not something that was “discovered” during the home inspection. A few examples of known conditions include:

  • Peeling paint
  • Damaged interior walls
  • Damaged floor coverings
  • Deteriorated driveways or walkways
  • Any conditions listed in the Seller ’s Property Disclosure Statement

If any of these are going to be negotiation items, they should be negotiated before the inspection.

Old = no negotiations

We frequently hear discussions of old components or components that are at or near the end of their service life expectancy. This shouldn’t be a negotiation item. Technically, the buyers can ask for anything, but to ask for replacement of a fully functioning used or old component in a fully functioning used or old house is a bit much. Here are a few things that need to be periodically replaced on homes:

  • Windows
  • Furnace
  • Air Conditioner
  • Water Heater
  • Appliances
  • Garage door opener

On the other hand, if a home seller advertises a “new” feature, but that information is not accurate, that would be a completely different story. Also, if a home buyer discovers numerous items at the end of their life and they know they won’t be able to afford replacements soon, they might decide that the home they’re buying isn’t the right one for them… unless perhaps the seller would like to help out. It’ s not unreasonable to renegotiate at this point, but a price negotiation typically won’t help a buyer, because this doesn’t give the buyer any more cash to deal with repairs or replacements.

Minor defects = no negotiations

Used houses aren’t perfect. Part of being a homeowner means spending time and money on the house. This is something that home buyers must accept and plan for. Here are some small, petty things that we feel home buyers shouldn’t ask sellers to address:

  • Missing cover plates at outlets, switches, and junction boxes
  • Missing caulk
  • Dirty furnace filter
  • Dirty AC condenser
  • Damaged insect screens

Code changes / safety upgrades / energy upgrades = no negotiations

While a home inspection is not a code compliance inspection, home inspectors often recommend safety upgrades due to changes in building codes. It’ s bad form to ask a seller to make these types of upgrades. That’s not to say these safety and energy upgrades are not important, but we believe they make for somewhat petty negotiation items. A few of these conditions include:

Of course, there are always exceptions. If new work was performed at a home and advertised as such, it’s only fair to expect the work to be done properly.

In closing, if a home seller is already upset because they’re selling their house for less than they wanted, they won’t be happy to receive a list of small chores from a home buyer in the form of a purchase agreement amendment. This can be the straw that breaks the camel’s back, leading to the deal falling apart. We hate to see this happen because items that cost hundreds of dollars to fix should never hold up the sale of a property that costs hundreds of thousands of dollars. Our advice to home buyers is to not put yourself in that position. Treat the home purchase like a relationship; do you want to be right, or do you want to be happy?

Let the little stuff go.

Part 3: Reasonable Negotiation Items

For this section, we’re covering some common home inspection findings that are frequently negotiated. We’re not saying these items should be negotiated, but these are common items that get negotiated, and we don’t feel that
any of these things are unreasonable.

What all of these items have in common is that they’re usually expensive, not obvious, or take special knowledge to recognize.

Big Roof Problems

  • Leaking roofs
  • Defective shingles that could allow for leaks
  • Improper roof installations that could allow for shingles to come loose
  • Roof coverings at the end of their life

Why do we mention roof coverings at the end of their life as a reasonable negotiation item, but excluded old appliances in part 2? Because appliances can be replaced after they fail. Roof coverings should be replaced before they fail.

Big Electrical Items

  • FPE Stab-Lok panels
  • Overloaded electrical panels
  • Aluminum branch circuit wiring
  • Unsafe knob & tube wiring
  • Pervasive electrical hazards (open spliced wiring, unprotected wires, improperly wired outlets, etc.)
  • Immediate shock/electrocution hazards, such as exposed, live wires protruding from walls
  • New, improper electrical wiring where the extent of the defects is unknown

Big Exterior Problems

  • Masonry chimneys in need of more than minor repairs
  • Windows in need of replacement
  • Rotting or water intrusion at the walls
  • Siding in need of major repair or replacement
  • Unsafe decks

Big or Immediate Plumbing Items

  • Galvanized water distribution pipes that do not supply adequate water flow
  • A water supply pipe from the street to the house that may need replacement
  • Galvanized steel drains in need of replacement
  • Active leaks – water piping, gas piping, drains, vents, etc.
  • Clogged drains

Big or Immediate HVAC Items

Other Things that Freak People Out

  • Wet basement issues
  • Moisture or frost in the attic, and/or major ice dam issues. The fix for both of these is to address attic air leaks, insulation, and sometimes attic ventilation. While adding insulation is generally considered an upgrade, if insufficient insulation and attic air leaks are leading to water problems, we consider this to be a repair, not an upgrade.
  • Foundation problems
  • Major structural deficiencies
  • Negotiations After The InspectionEnvironmental items that are excluded from home inspection standards, such as:
    Buried fuel oil tanks
    – High radon
    – Loose/friable asbestos

There are many other possible items, but this list makes up most of the ‘big’ items that get identified during home inspections.

Thank you for reading. If you’d like a printable copy of this blog post in a pdf format, please click on the image at right.

Author: Reuben SaltzmanStructure Tech Home Inspections

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No responses to “Negotiations after the inspection”

  1. Joe
    March 20, 2018, 9:23 am

    Ruben, several months ago you had a piece on attic insulation and the importance of hiring a great company to look at venting, etc. you listed 2 companies in the twin cities you would recommend . Can you give me the names again? I need to hire someone to check out our attic .
    Thanks
    Jaovo

  2. Reuben Saltzman
    March 20, 2018, 9:43 am

    Atticus and Houle Insulation.

  3. Amy Ritter
    March 20, 2018, 10:45 am

    Excellent as always ! Sharing with clients and past clients momentarily!

  4. Reuben Saltzman
    March 21, 2018, 7:51 am

    Thank you!

  5. jane
    March 20, 2018, 8:18 pm

    I enjoy your blog. Could you please consider discussing new construction design features such as multiple gables/roof lines, fake windows in attics and mix of building materials? I suspect they eventually become points of failure and would appreciate your opinion.

  6. Reuben Saltzman
    March 21, 2018, 7:53 am

    Hi Jane, thank you for reading! I covered a lot of that stuff in this blog post: http://www.structuretech1.com/new-construction-tip-plan-for-water-management/

  7. Larry Buck
    March 21, 2018, 7:34 am

    Ruben, You are out of line, regarding how to negotiate after an inspection. I assume that Real Estate agents should now tell home inspectors how to inspect a house?

    Larry Buck

  8. Reuben Saltzman
    March 21, 2018, 7:50 am

    Hi Larry,

    Thank you for chiming in! Did you happen to read the paragraph under Part 2, which said “We at Structure Tech are not real estate agents nor attorneys, so this is not real estate advice or legal advice. These are our opinions. We don’t share these opinions on negotiations during home inspections, nor do we share them in our inspection reports. This is completely outside the realm of a home inspection, and honestly, it’s outside the realm of our area of expertise. Nevertheless, we certainly have opinions about this stuff. The following is a list of things that we generally feel should not be negotiation items as a result of a home inspection.”

    Does this change how you feel?

    If you decided to write an opinion piece on things that home inspectors should and should not say during a home inspection, I would certainly enjoy reading it. I would surely learn from it, and I might even do things differently after reading it. It’s possible that I might not agree with everything you wrote, and I’m sure you’d be open to having a discussion about it, right?

    Again, thank you for taking the time to comment.

  9. Bil
    March 31, 2018, 5:32 am

    Larry, you must be a realtor that has been burned when a major fault was discovered when you didn’t want it to be – or – you just read the headline.
    If you READ the article, you would see that in all but a few major cases, Ruben was saying “just because an issue is listed on the report, don’t try to reopen negotiations”

  10. Dan
    March 28, 2018, 5:01 am

    This article is spot on and realistic and sure helps the parties navigate the murky waters of whats important and reasonable to negotiate after the inspection.

  11. albers
    April 6, 2018, 1:43 pm

    Nice work Reuben. There are many inspectors that should read this in its entirety, as well!

  12. Negotiations After the Inspection | Navigator Home Inspections, Inc.
    April 14, 2018, 6:21 pm

    […] Negotiations after the inspection […]

  13. Leslie Campos
    May 1, 2018, 11:21 am

    In our market almost all loans are VA, FHA or USDA. Peeling exterior paint will kill the loan. And, for USDA Direct, missing electrical plate covers will also kill the loan among other items on your list not to be negotiated. A buyer’s agent needs to be familiar with the general condition issues that can kill their buyer’s loan and should ask for those repairs before the appraiser does the report. Appraisals are running so late now that waiting on the appraiser and then finding out that the seller has to paint the exterior of the house within a week is unreasonable.

  14. Bon
    May 17, 2018, 1:00 pm

    I found this article very good and just wanted to comment and ask a question. Does anyone have an idea how to get the realtor more involved without having them think we are taking money out of their pocket as I get a lot when we do foundation inspections and find possible cracks that can lead to some costly waterproofing repairs or even foundation lifting? Appreciate any advice

  15. Jason Jordan
    June 16, 2018, 8:50 pm

    Great article. What do you think of an inspection report that includes the following? I’m curious as to how he confirmed insufficient combustion air. Is there a particular test for this that a home inspector normally does? FYI, a previous inspection 9 years ago made no mention of this.

    SYSTEM TYPE: Forced Air.
    FUEL TYPE:
    Natural Gas.
    CAPACITY OF UNIT: 60,000 BTU.
    APPROXIMATE AGE:
    20+ years, Older model – past the end of its useful life. Budget for potential large
    expense. Furnace / air handler average life expectancy is 15 – 20 years.
    CONDITION OF UNIT:
    Appears operational.
    No signs of recent / regular servicing.
    BURNERS/HEAT EXCHANGERS:
    Burner Flame(s) appear typical, The heat exchanger portion of a gas or oil fired heater is difficult to access without disassembly, and cannot be adequately checked during a visual inspection. We recommend a service contract be placed on the unit and a heating contractor called to verify the condition of the heat exchanger prior to
    settlement date.

    PUMP/BLOWER FAN:
    Appears Serviceable.
    COMBUSTION AIR: Insufficient combustion air! This situation can cause headaches, nausea, dizziness or asphyxiation. It can also cause excess water in the heat exchanger resulting in rusting and premature heat exchanger failure – Usually a louvered door or two, properly sized grill openings in the wall will correct the problem. If the furnace is installed in a confined space within the building and combustion air is taken from a heated space, the combustion air and ventilating air must enter and leave the space through two permanent openings of equal area. One
    opening shall be located within 12″ of the ceiling and the other within 12″ of the
    floor. Each opening must have a free area of at least 1 sq. in. per 1,000 Btu/h of total
    input rating of all equipment in the enclosure, and not less than 100 sq. in. each.
    Contact a licensed HVAC contractor for further evaluation and repairs as
    needed.
    VENTING: Appears serviceable.
    Corrosion is noted at the vent pipe. Monitor in the future.

  16. Reuben Saltzman
    June 17, 2018, 6:25 am

    Hi Jason, you’d need to ask the original home inspector to know for sure. I’m guessing that the furnace was located in an enclosed space with no combustion air, and the home inspector took note of this. I’m guessing that no calculations took place; it was a simple assessment. That that we do here at Structure Tech, and we stand behind our recommendations.

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