Every realtor knows that no real estate transaction is complete until money has exchanged hands. However, many homebuyers and sellers think that the “deal” is done when the contract is signed. In the vast majority of cases, particularly in the current seller’s market, negotiations and deal-making only begin when the contract is signed. Negotiations can stretch into the escrow period in such a competitive environment. One of the most common times that issues arise is after a home inspection.
Before you enter the negotiation process, you should remind your homebuyer or seller on the realities of the situation. No home is perfect. Even new homes that were just finished are not always perfect. It is completely normal to have an inspector find issues within a home, as that is what the inspector is hired to do. However, every problem identified is not necessarily a major one. The purpose of a home inspection is to identify major defects that would prevent a buyer from finalizing the transaction or needing to have repairs done. Home inspections are not for finding a long list of small items just to alter the purchase price.
Inspection Credits Over Repairs
Instead of pushing for repairs, it is wise to suggest a home inspection credit instead. Offering the cash value of the repairs as a credit is a better deal for the home seller. If the buyer will only agree to repairs, it’s easy for closing to be delayed or the home’s appearance and value to be altered by the renovations. Inspection credits allow the homeowner to pick a contractor and solution and the purchase to move forward.
Don’t Trade Pennies for Dollars
One of the most common sayings in negotiation is to not trade pennies for dollars. If a buyer approaches a seller with a long list of issues, both big and small, the buyer is giving the seller to the chance to trade off pennies (small items) for dollars (big items). For example, a home inspector finds a cabinet door that won’t close, a doorknob that needs to be replaced and a broken hot water heater. The first two issues are quick and inexpensive fixes, but the third is an investment. When asking for changes, tell buyers to focus on only the significant items to avoid trading small repairs for what really matters.
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Homeland Title & Escrow offers a broad range of title services, including complimentary consultations for first-time homebuyers. To learn more about our services, give us a call at (410) 544-6700.