How to negotiate after a home inspection
Quick insights
- After you receive the home inspection report, you can negotiate with the seller to request repairs, seller concessions or price adjustments during the inspection contingency period.
- Seller concessions may help reduce closing costs or preserve cash for your down payment and future repairs.
- Understanding inspection-related negotiations could affect the cash you need to close or your monthly mortgage payment.
Getting a home inspection can feel like opening the door to a lot of new information at once. One minute, you’re picturing throw pillows and dinner parties. The next minute, you’re staring at a 40-page report filled with photos of pipes, wiring and things you may not have thought of. What you do with the information is where a negotiation process might begin. With a home inspection contingency in place, buyers and sellers can work toward a win-win solution.
What a home inspection is really telling you
A home inspection doesn’t provide a detailed rating of whether a house is “good” or “bad.” Almost every home, even newer builds, comes with a list of findings. Some items may be cosmetic, like loose fixtures or worn caulking. Others could involve larger systems, such as plumbing, electrical, roofing or HVAC.
The inspection gives buyers information they didn’t have when they made their offer. The report might have details the sellers didn’t even know about. The new information can shift what feels financially reasonable for both parties.
Why the inspection contingency matters
The inspection contingency is the part of your purchase contract that gives you the opportunity to review the inspection results and make a decision. This contingency creates a structured, time-bound window for conversations about the condition of the home before you move closer to finalizing your loan, down payment and closing costs.
During this period, homebuyers may be able to:
- Request repairs
- Ask for seller concessions
- Negotiate the purchase price
- Even walk away after a home inspection
Step-by-step guide for negotiating after a home inspection
Whether you’re new or experienced at negotiating after a home inspection, strategy can help.
Step 1: Review your inspection report
As soon as you receive the home inspection report, focus first on major issues related to structure, safety or key systems. Examples include the roof’s condition, electrical and plumbing work, foundation problems and HVAC health. Findings with these elements should be addressed quickly to safely inhabit the home. And as a result, they justify a negotiation request.
Step 2: Separate “needs” from “nice-to-haves”
While you might want to address every item in an inspection report, that’s probably unrealistic. This also means not every issue should lead to a repair request or seller concession. For example, cosmetic issues (like scuffed paint or old cabinet hardware) are things that can wait. However, big-ticket concerns that affect the structure or home value should probably be part of a negotiation.
Step 3: Decide what you want to ask for
There are three main types of requests you could make after a home inspection:
- Request repairs before closing, especially if something impacts safety or financing.
- Ask for seller concessions or credits that could be applied toward closing costs or future repairs.
- Propose a price reduction, so you have more cash available for needed work after closing.
Step 4: Quantify your requests with estimates
Working with a real estate agent or other professionals, such as a contractor, can help you decide what to request. Backing up your requests with ballpark repair costs, either from contractors or online resources, can make your negotiation more grounded.
Seller credits could affect your closing costs and money you have for your down payment. Using an online mortgage and affordability tool like the Chase mortgage calculator can help you estimate monthly mortgage payments with different amounts paid up front.
Step 5: Submit a written request through your agent
Your real estate agent usually prepares a formal addendum or inspection response that lists the items you’re asking the seller to address. Being clear, specific and reasonable is important. In addition, focusing on the things that would be costly if left unaddressed may strengthen your position.
Step 6: Prepare for more negotiation, just in case
Once your request is submitted, the seller may:
- Agree to some or all of your requests,
- Offer a smaller credit or partial set of repairs, or
- Propose a price adjustment.
Depending on the problems involved, a back-and-forth can be normal. Ultimately, both parties may have to reach a compromise or agree to walk away.
Step 7: Document any changes
A purchase agreement amendment or addendum can document changes you negotiate after a home inspection. Here are the key steps:
- Identify items: Clearly state each repair (required standard of work and deadline), price reduction, or closing credit.
- Require proof: This could be paid receipts and pictures for all completed repairs.
- Waive contingency: Explicitly state that the inspection contingency is satisfied upon execution.
- Execute: Both parties must sign and date any addendums to make them legally binding.
In summary
Negotiating after a home inspection can be a difficult but constructive process. An inspection contingency is critical to have in place if you want an opportunity to negotiate after receiving the report. Main options include seller credits, specific repair requests or a price reduction to offset repair costs. Regardless of how much negotiation happens, buyers should document agreed-upon changes in an addendum or amendment to the purchase agreement.
