Home Warranties and Inspections - Problem With Home Inspection...Advice, Please!

Hello group! I recently had a home inspection done on a home we are purchasing and certain issues came up that were unexpected during the inspection. These are not issues that warrant us not wanting to buy the home, but we would like to be compensated for the expenses of repairs and upgrades that will be needed prior to living there, in the area of $5K to $8K. Is it normal to make such a request and are concessions usually made for things like this? Any advice would be greatly appreciated! :confused:

spark71, Welcome to the DIY Forums.
Your inspector did exactly what was expected (and paid for) of him/her. Inspections are to let you know of any defects that may make you not want to buy the house. These issues are now negotiable with the seller. If they are serious issues, the seller now has to acknowledge them to future buyers should you decide not to buy. Good luck.

This is now a negotiating point, like many other things in the process. If you want $5-8k off, I'd start by asking for $10,000.

Depends on the market in your area, if its still hot don't count on too much happening esp for upgrades, repairs maybe. If they took you offer quick then they were prepared to go lower but didn't have to so they prob still have that room in the asking price and may reduce price. What were the big ticket items the inspector found?

I am in the same boat as you are, although I have a pretty major structural problem.

In south Florida which is where I live now, where properties are selling usually at or above asking price still with little to no negotiating room, it is very difficult to deal with this.

But the contract should stipulate this. Our standard contract has a built-in percentage that the seller is obligated to repair items that are not working, or put money in the escrow for the buyer to fix later. The typical percentage is 3% for termites and 3% for everything else. We also can do as-is contracts where the seller can hire the an inspector to perform the inspection, and if the inspection result exceeds a certain maximum amount, the buyer can walk away. In that case it becomes an negotiation again. But in this market we have in SF there is not much room to negotiate because multiple offers are lined up. Hopefully where you are there is more leverage.

As far as how much, I normally try to do the fair thing. If it is a structural defect of some sort, I will expect 100% repair cost to be covered. If it is an appliance like an AC at the end of their useful life, I do a 50/50 split with the seller as you expect a functional AC, not a brand new AC etc...

MC

Any reports from the home inspector that are shown to the seller and should be disclosed to future purchasers since the seller was informed of the problems.

This gives you ammunition for negotiating since the seller MUST disclose the items to future purchasers. He agreed to the inspection and you paid for it. - Just one of the benefits and values of a home inspection.

Dick

Thank you all who gave me some input. It si always greatly appreciated. As I mentioned, the problems don't warrant walking away, I would just like some of the original price shaved off the top to cover the expenses and hassle that I consider above and beyond that of home buyers. The main issues are chimney and fireplace structural issues as well as seriously out-dated electrical disconnect and panel (I am opposed to anything not breakered). I'm not in quite the same pickle as Miami but I hear ya loud and clear, and Best of Luck with that one.:wall:

A few thoughts.

First, on negotiating based on items found at the inspection. I typically advise clients to ask for compensation rather than repairs - this ensures that the work will be done by someone you slect and will be done to your satisfaction. Here in PA, I typically find that buyers have either a $1000 or greater clause (meaning speicific items over $1000 to correct are negotiable or seller's responsibility) or there is a $2000 cumulative cost clause (meaning once the total cost of corrections hits $2K, the seller ahs to kick in some $$).

Most sellers accomodate based on the inspection since other future inspections will turn up the same results.

Next, fireplace structural issues can be WAY costly - get estimates for the work!

Finally, electrical. If by "non-breakered" you mean fuses, then you may want to check with electricians. Many will tell you that fuses actually are superior since they trip instantanously, where breakers require a fraction of a second. The problem with fuses is that they are easy to cheat (by inserting a penny or using a 30A fuse where a 15A is needed, for example). Also, the age of the installation and wiring in this case sound like they warrant replacement on that basis. I just wanted to point out that people should not be afraid of fuses simply because they are not the breakers they are familiar with.

I missed the biggest point!

This may seem to be a matter of semantics, but you might consider not asking for "money shaved off the original price" as opposed to cash back at settlement.

The difference seems small but think about it this way:

You get $5K knocked off the agreed price, now you have a slightly lower mortgaage payment and no $$ in pocket for the repairs.

You get $$ back at settlement, you still have the initial mortgage, but now you are getting cash back with which the repairs can be made immediately. Big difference.

Like I said, you may have already considered this, I just thought I would make the point in case you had not ever considered it before.

joe's right, that few thousand in the bank will come in real handy, what with moving expenses, redecoration, and just misc expenses.

We're closing in 2 weeks and the seller lives out of state now. Their realtor got a contractor to take care of one "decorating" issue (floor to ceiling mirrors in the foyer and hall... ugh!) but the other items we raised following the inspection were pretty minor. Rather than them have to manage contractors from afar, or pay the realtor to be their general contractor/project manager, we offered them a chance to credit us a fair dollar amount for the work and be done with it. They get zero hassle, and we get the work done the way we want it done, we get the warranty and right of approval on the work (where applicable), and I get cash to buy a bunch of sorely needed power tools.

[Don't tell my S.O. about that last bit - she thinks it's her paint budget.] :D

As a novice in Selling a home, I have a couple of questions that aren't clear to me....

1. Who is responsible for paying for the inspection of the house that is being sold ?

2. If the house is being sold with the clear understanding by the real estate agent and the Seller, that the house is being sold "as is"...what is the level of legal responsiblity of the Seller of the house to the defects found by the inspection process ?


Thanks for your help in me understanding this !

Mike

Hi Mike. Welcome to the forum!

Whoever agreed to pay for the inspection is responsible. Seller or buyer can pay. Though an inspection is not required it is highly recommended. At least that's how it is here in CA.

You have no responsibility to any findings of the inspection as long as you've disclosed what you do know of that is defective or broken, missing, etc. Buyers may request but it doesn't mean you have to perform. Though, keep in mind, that may mean the buyer(s) can or may back out.

And, if you opt for cash at closing be sure you know how it will be treated by the tax man. Don't take anyone's word for it here, get your own tax accountant/attorney's advice. I'd hate for you to get a surprise 1099 at the end of the year.

I missed the biggest point!

This may seem to be a matter of semantics, but you might consider not asking for "money shaved off the original price" as opposed to cash back at settlement.

The difference seems small but think about it this way:

You get $5K knocked off the agreed price, now you have a slightly lower mortgaage payment and no $$ in pocket for the repairs.

You get $$ back at settlement, you still have the initial mortgage, but now you are getting cash back with which the repairs can be made immediately. Big difference.

Like I said, you may have already considered this, I just thought I would make the point in case you had not ever considered it before.

That's fine if your property taxes aren't based on the market value of your house. By taking money back you setting the value of the house higher. And the value of my house which is set every two years based on sales of comparable homes in my area.