Ways A Home Inspection Can Lower The Final Price
Even though you will have to spend money upfront for a home inspection, you may save more money than you anticipated once the results come back. This is especially true for older homes or new homes that were not built using the right materials or according to safety codes.
There are a few ways you will be able to negotiate a lower price on the home before signing the final contracts.
- Ask homeowners to make repairs
This is the best way to save money on your new home. While you will not see a reduction in the final price of the home, you will not have to make as many repairs down the road. Also, you will not have to worry about the repairs once you have moved into the home.
While all homeowners are different, you should be aware that many do not want to make repairs unless the home absolutely cannot be sold in the condition it is in because it will endanger the new owners. Even minor repairs may pose a problem for homeowners. You should be firm, but friendly when negotiating this part of the contract. If you do not want to make these repairs and you strongly feel that the repairs should be made by the homeowner, you can still walk away from the home and find another.
You should give homeowners a week to think about making the repairs. Most homeowners will make their decision quickly because they want the sale to go through.
- Ask homeowners for a price reduction
If the homeowners do not want to spend money on the repairs that you have requested, they may agree to drop the final price of the home. While the price reduction will not be too drastic, any reduction is a good one since you will have to make the repairs yourself down the road.
If the homeowners suggest a reduction in the final price, you should consider the offer and find out how much the repairs will cost you. If it seems like a fair deal, then take it. If not, you can always ask for a larger reduction. Most buyers and sellers eventually agree on a price that will suit both parties.
- Ask homeowners to pay for all closing costs
Another way to save money without relying on the homeowners to pay for the repairs is if they agree to pay the closing costs on both sides. This will free up some of your money so that you can make the repairs yourself.
You may have to have a separate contract drawn up that will explain what the homeowners are responsible for paying, and what you are responsible for paying. This will make buying the home much easier.
Any agreements that you make with the homeowners should be made in writing. Verbal agreements do not stand up in court, and are not common practice among real estate lawyers and agents when they are closing a deal. Your agent should make this clear to you at the beginning of the home buying process.
Do not be discouraged if there seems to be a lot of paperwork. This is necessary and the usual standard practice for those who want to protect themselves from wrong doing and lawsuits later on.
The Final Walkthrough
On the day of the closing, you should have a final walkthrough whether you are purchasing a new home or an older home. Final walkthroughs are a way for you to determine if there is anything else you will need to discuss, get in writing, or have changed before you sign the paperwork.
The final walkthrough will include you, the homeowners, real estate agents, and if necessary, your lawyer. Unfortunately, many buyers skip the final walkthrough in anticipation of moving into the home quickly. But you should have one more walkthrough just to be sure.
The benefits of a final walkthrough include:
- Making sure all repairs that were conceded by the homeowners have been made
- Be sure additional repairs are not necessary
- Walls are intact
- Plumbing is intact
- Flush toilets in the home
- Garage door opener
- Test doors and windows
- All appliances that were remaining are still in the home
- Appliances are in good working condition
- Electrical systems are working by turning on all lights
- All junk is removed from the yard as per prior agreements
You will feel much better after the final walkthrough for many reasons. You will get to see first hand the repairs that have been made, you will begin to see yourself living in the home, and you will be able to plan for the future in terms of what you want to keep in the home and what you want to remove.
In some cases, you will never meet the homeowners. If they have moved before putting the house on the market, you may be dealing directly with the homeowner’s lawyer. It is still a good idea to ask questions about the home before signing the final paperwork.
The closing is your last chance to ask for changes to the contract, to bring up any concerns, and to ask the homeowners any questions you may have about the home and the property.
At the closing, you should bring:
- A notepad
- Financial notes and mortgage approval paperwork
- Signed paperwork you have received over the course of the deal
- Identification, and
- The home inspection report
At this meeting, you will be signing the paperwork that will make the home yours. This is a very exciting time, but you should maintain your composure to make sure that you are getting what you are signing for. If repairs have not been made, then you have the option to wait until they are complete.
When To Walk Away
Any time after the home inspection if you begin to have doubts about purchasing the home, you should contact your real estate agent and voice your concerns. Many first time homebuyers need reassurance that they are making the right decisions. Your real estate agent will want the sale to go through, but they know that there are other properties they can show you, so they are not really losing money if you decide to not buy the home.
There are many reasons to walk away from a home sale. These include:
- A bad report from the home inspector
- The homeowners are unwilling to pay for necessary repairs
- You find another home that suits your needs
- The price for the home is too high
- You decide you don’t like the neighborhood
- Loss of your job, or
- A medical emergency
Walking away from a home is not giving up on your dream of homeownership. Unfortunately, there are times in life when buying a home is not possible. If the financial strain is going to be too much, for example, then you should seriously consider finding a lower priced home or a smaller home.
If you decide to walk away from a home, you should give yourself a few weeks to recuperate before going out there and finding another home. You should contact:
- The real estate agent
- The lender, or
- The builder
Let them know of your decision and that you will be in touch when the time is right. Many times after a bad report from a home inspector, it is just not worth spending the money on a home that will require a lot of repairs down the road. While all older homes will have some repairs, you should know the limits of what is acceptable and what will cost you too much money.
If you can get enough financing and you want to pursue the home regardless of the repairs that will have to be made, then go for it. Sometimes buying an older home and fixing it up can be a fun activity for everyone involved. Only you can make these crucial decisions. A home inspection will help you realize how much work and money may be involved if you decide to purchase the home.