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Negotiating inspection issues:

Some buyers have the right to cancel a contract if the inspection reveals unacceptable defects.  Most contracts provide the opportunity to negotiate the repairs to the satisfaction of the buyers. This includes either doing some or all the repairs and/or compensating the buyers with cash.      

 Contemplate your options:

Are the buyers' requests reasonable? Decide just how motivated you are, how motivated you think the buyers are, how much you’ll agree to repair and just what things you think the buyers will accept without repair. Are some items just simple repairs that you can easily fix? Did the buyers give you a laundry list of repairs with the express purpose of killing the deal?

Solve the problem:

Although a whole house inspection may turn up an expensive repair, you may be able to negotiate a cash settlement that is less expensive than what the repair would have cost. Offer money to the buyers so they can choose how the repair is completed instead of accepting a repair performed at your expense. They may find this very appealing if you diplomatically point out the benefit.

A classic example is one where the seller's furnace died just prior to closing. The buyers understandably wanted a new furnace. The cheapest one to be found was $1,900. Without telling the buyer this amount, the agent, representing the seller, recommended that the seller offered to give the buyers $1,400, pointing out that they can use this money towards installing any type of furnace they wanted. Otherwise the seller was obligated to just install a new one that worked. The buyers took the money and the seller saved $500.
Avoid repairing items that lend themselves to a subjective interpretation as to how well the repair was done. Let's say the garage roof needs some serious shingle repair and replacement. After completion, what if the buyers don't think the new shingles match the originals that well? Who needs that headache! Offer the buyers money so that they can repair this type of problem by themselves and you'll save a whole lot of problems.

Money, unlike repair work, is not subject to interpretation. It sure beats sweating out the buyers’ approval, which is often done at the eleventh hour walk through. A dollar settlement is almost always acceptable to buyers and it eliminates last minute problems.

Avoid the killer repair:

Suppose you have an issue that’s going to be a real thorn in your side. It’s not something that is a danger or health concern to future occupants, but a project that you just don’t want to expend the time and effort in dealing with, like removing an old oil tank from your basement or removing an old above ground swimming pool and having to deal with ground and landscape issues.  

Play the numbers game with the buyers by offering to repair other items. Appeal to their sense of fairness by pointing out how you’ll do this, that and the other. List each of these items that you’ll repair, working to illustrate that your time commitment for fixing problems is extensive.

Then tell the buyers that you just can’t get everything done and that you’ll do all the rest but this one thing. By emphasizing the large number of items you’ll be repairing, your effort should appear very reasonable. This may work.

However, the buyers could say, “But that’s the one thing we wanted resolved.” In this case, ask them if you put all your efforts into solving that one problem instead of the others would that be acceptable? You’re trying to get them to feel empathy for you and hopefully they’ll back off on demanding that you confront your key problem.

Don’t duck a serious problem:

The inspection could uncover a previously unknown, but serious home inspection problem. If you refuse to repair or negotiate a dollar remedy, the offer could fall apart. If it does, the problem becomes even larger. Now you are legally obligated to disclose this deficit to future prospects, which will eliminate some potential buyers. The problem will still be there and it will surface during the next inspection. Fix it now and move on with your life.

Appeal to the buyers’ sense of fairness:

After you and the buyer negotiate back and forth through a list of issues, point out to the buyers that inspectors, like appraisers, are only offering their opinion. Granted, they are based on experience, but no two inspections will be alike.

Whether the inspector made a bigger deal out of some problems or these happen to be his pet peeve about houses in general, let the buyers feel your frustration. Appeal to the buyers’ sense of fairness. Shift the focus onto the inspector; never blame the buyers (even when they are being obstinate). Then work the conversation to, “I'm sure we can come to an acceptable and fair agreement on the inspector’s 'opinions'.”

If fear of potential repairs is the central issue, prepare yourself like a real estate pro by having answers ready about using a home warranty (see the Negotiate Step).
More on HOME INSPECTIONS 

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