Asking for Price Reduction after Home Inspection | Try these Tips
After your home inspection, you might be surprised when the inspector comes back with an estimate much higher than what you expected to pay. You probably don’t want to hear that you need to repair this or replace that, especially if it will cost you more money upfront.
Fortunately, there have been some guidelines you could indeed implement to help you ask for a price reduction after the home inspection in a way that increases the likelihood that the seller will listen to your request and negotiate on price so that both of you are satisfied with the transaction as it moves forward.
Determine if it’s a deal-breaker
One of your first questions, when faced with a disappointing inspection report, should be whether it is a deal-breaker. A major structural defect or fundamental problem with your house can make it much harder to sell in a competitive market, so there’s no sense in wasting time trying to save money on minor issues.
If you can afford to walk away from a bad deal, do it now and consider moving up your timeline. Because when buyers are few and far between, sellers hold all of the cards as they are now. So if there’s an unappealing element that could impact your decision to buy, know before you go into the contract that you have options to back out if needed.
Ask the seller nicely if you can get a discount
Although you can certainly feel free to negotiate with your seller, a hard-nosed approach puts off some sellers. Instead, politely ask if you could get a deal on their house. Maybe they’ve been trying to sell it themselves or are eager to move into a new place. You can also help them look for a new house and sweeten the deal by offering them an incentive to pay closing costs if they move within six months of selling their home.
When it comes down to it, many sellers will be willing to negotiate with you to close a sale, especially when buyers are scarce.
Ask other agents how much they would charge for fixing it
As a potential buyer, it’s important to reduce your asking price as much as possible. Unfortunately, some buyers will make a low-ball offer right off the bat, hoping they won’t have to negotiate if they don’t ask.
To have a better idea of what you can expect to pay and have a better chance of winning a negotiation with another agent, try asking around (off-the-record) to find out how much other agents in your area would charge for fixing certain problems. However, you could ask relatives or friends who’ve recently bought a home in your neighborhood; they may have an idea of what sellers in their neighborhood tend to accept or reject.
Contact your agent and explain your situation
Not all agents are out to sell you a house; some want to help you find what’s right for you. It will help if you call your agent ahead of time and tell them your problem.
You might be surprised by their response. All of my clients come in with concerns, so when I hear that, I always ask them to contact me later if they can’t resolve it themselves, as most issues are fixable (if not by one person). Unfortunately, my clients often call me later in frustration and immediately tell me, ” Oh! You were right! It was easy!
Do your homework on similar houses in the area
If you are asking for a reduction in selling price, you need to be able to justify your demand with data. You can easily get information about other homes sold in your area by looking at publicly available records online or hiring a real estate agent. Making a thorough comparison will show you whether there is something wrong with your house that makes it less attractive than comparable properties and thus warrants a lower selling price.
You might also like to think about getting your property appraised by an independent appraiser. For example, suppose it turns out that your house is worth significantly less than what you are trying to sell it for. In that case, you’ll have solid proof and an objective third-party endorsement on which to base your argument.
Understand what exactly constitutes a deal-breaker
A buyer might decide to ask for a discount simply because they’ve found another property that’s just too good to pass up. The key is figuring out what’s truly deal-breaking and not quite perfect.
Focus on structural issues, major faults with appliances, or an asking price beyond your budget. That when you do not intend to stay in the house for an extended period (e.g., you’ll move on if your child gets into a top-tier school district) and want a quick sale, make sure potential buyers know why you want to sell quickly—it may be hard to get a hefty discount at that point.
Understand what you can and cannot tolerate.
How you deal with a request to lower your offer will depend on what it means to you. For example, if a location is very important to you, asking for a lower price could be detrimental. However, when many pretty similar properties sell at similar prices throughout your neighborhood, they all have a few issues.
Therefore, asking for a slightly lower price may not have much of an impact on your decision to purchase. So take your time and know what’s most important before setting foot in an open house. And remember: even if you ask for a discount after an inspection, that doesn’t mean you won’t get one before or during one!
Use common sense when making an offer
If a house is listed at $350,000 and has been on the market for quite some time without any offers, you can probably buy it below asking. On the other hand, if there are only a few homes like it in your area and they’re selling fast and going for well over $300,000, don’t be afraid to offer full price or even more.
Your broker will help with an analysis of comparable sales. If you need to lower your offer but want to avoid antagonizing an already cranky seller, try asking if he’ll accept something less than his bottom line; there’s no harm in giving it a shot.
Many homeowners feel at a loss once their real estate agent has handed them an inspection report. They’re at a loss for words and actions when they meet with their agent and inspector again, and they wonder if they can ask for a lower purchase price after a house inspection.
The answer is usually yes, especially regarding foundation problems, which will be expensive to fix. If you’re trying to buy in an upscale neighborhood where comparable properties cost more than $500 per square foot (per an analysis by Trulia), don’t expect your seller to reduce the purchase price on even severe structural defects like cracks in foundation walls.