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So, you’ve placed an offer on a property and it’s been accepted, that’s great! But any good investor knows that that’s not the end of buying a home. Being able to negotiate the results of your property’s home inspection is the next hurdle you face. Negotiating the results of the inspection are very important as an investor and below are some tips for how to best negotiate for repairs or a better deal following your home inspection.
But first, it is important to note what is inspected during a home inspection. A home inspection includes a report of the following aspects of a home:
A home inspection is a visual inspection and there are still many important aspects of the home that are not covered under the inspection, but it does provide a good overall depiction of the condition of the property you are looking to invest in.
Asking the seller to make repairs.
While this option isn’t always recommended for homes that often draw an investor’s eye, repairs are still up for negotiation—especially for major issues such as mold. Sellers may consider making repairs an inconvenience and not worth the effort, causing them to look at other offers if you ask for them to make repairs. So, weigh your options carefully on a home you are looking to invest in, especially if it was described as an “investor special” or “handyman special”; these keywords often indicate the home requires a lot of work and the listing price often reflects this. Also, the repairs are up to the seller’s standards and the buyers have no say in what is done or how it is fixed, so their repairs could affect your plans for the home.
Asking the seller to accept a lower offer on the property.
This can be a more enticing option for the seller compared to above because it does not pile on work for the seller to complete before closing when they are ready to leave the property. As an investor, repairs are commonly needed, so this negotiation tool is best used when the home inspection reveals deeper issues, ones that could eat into your profit, timeline, or plans for the home. If you make a lower offer, be sure to back up the request with the justification the original asking price is too high based on the condition of the home. A home inspection report can help you to do this.
Turn down the deal and continue your search for your ideal investment property.
If you elected to include an inspection contingency with your original offer and contract on the home and are not satisfied with the inspection report—or the seller’s response to your counteroffer requesting repairs or a price reduction—you do have the option to back out of the deal. Investment properties are only a good venture if there will be a return on your investment and the potential for income has to outweigh the cost of repairs and the original purchase amount. So, if the value of the home does not meet this, it may be your sign to look elsewhere.
It is our mission, but we also make it our passion, to thoroughly inspect your home. With over 30 years of building and home inspection experience and industry-recommended certifications on our side, AcuSystem will deliver expert inspection service, so you can make sound judgements in regard to the investment property you are considering.
