Investors: Don’t Negotiate Until You Know the Home’s Condition
Investors: Don’t Negotiate Until You Know the Home’s Condition. This isn’t our first discussion about home inspections—we know. I wrote 5 Reasons To Wait To Negotiate Until After the Home Inspection in order to relay a strategy that we personally have had much success with over the past three years. We find it much easier to negotiate once you have an inspection, which we do not advise a buyer to pay for until they have a bound contract. While some people disagreed, hopefully this update will clarify our position.
With an inspection in hand, you actually know the condition of the property and the function, or dysfunction, of the major systems. In our opinion, this is the only reasonable time to negotiate. If you try to negotiate at any other time, you are doing so from a point of emotion and unknowns.
Related: 5 Reasons To Wait To Negotiate Until After the Home Inspection
1. Real estate is a people business.
We believe in putting people first, always. That said, asking for an inspection should not offend a seller, or in any way be considered disrespectful to a seller. It is a buyer’s right, a right that we think all buyers should exercise if the situation allows.
It is not malicious or unethical for a buyer to ask for an inspection and then ask for the things that come back on that inspection to be rectified, especially when it is a property that the seller is asking market value for.
If a seller does not want to allow for an inspection, then they should simply not accept an offer with an inspection contingency.
Related: Your 48-Point DIY Home Inspection Checklist
2. You should know what to expect.
An inspection allows a buyer to see what issues the property currently has, or might have in the future, and provides a great opportunity to ensure the buyer knows what they are getting into.
If the inspection turns up major issues, particularly structural, safety, or with the major systems, we encourage a buyer to ask for those issues to be rectified, in one way or another, before closing. That said, each buyer is different and has different priorities. We encourage buyers to only negotiate on the things that are of the utmost importance to them.
Related: Investors: Here’s How to Increase the Value of Your Home or Investment Property
3. Time is of the essence.
This is true in almost every real estate contract. Even if it is not explicitly stated in a contract, no one—buyer or seller—should aim to extend any part of the process.
If you are a buyer, do not go past your inspection and resolution timelines. In extenuating circumstances, or when a specialist is required to investigate an issue on a property, ensure that the seller is on board with an extension and maintain open communication throughout the entire process. If a seller is unwilling to allow for such an extension, they can simply deny it, or terminate the contract.