Home Inspection Repairs vs. Buyer Negotiations: What’s Ideal?

A home inspection is often a must in the sale process. A buyer wants to know what they’re getting into upon purchasing a property. And a savvy seller should understand what issues the property has, so they can decide whether to repair them before going to market. 

If you’re on the selling end of a real estate transaction, a home inspection helps you set realistic expectations about how much you’d need to spend to get your property in tip-top shape or how much of a financial hit you might take on a sale due to the home’s issues. 

Here are seven tips for home sellers determining next steps after an inspection.

1. Talk to your agent

When you work with an excellent listing agent, you’re never alone in the sale process. This professional is there to guide you every step of the way. Lean on them for advice after receiving your inspection results. They can help you identify potential repairs, decide which work is necessary, and negotiate with prospective buyers.

That last point is especially important. Realtors are savvy negotiators who are emotionally removed from your home sale. This means they can face tricky conversations with buyers without conceding to unreasonable price drops over known flaws with your home. Your agent can help reach fair terms so that you maximize your sale.

2. Identify essential repairs

Some home issues create a serious headache for homeowners—present and future. These problems affect the functionality of the property and demand attention. A home seller doesn’t necessarily have to repair these underlying issues if they plan to instead negotiate a purchase price drop or splitting work with the buyer, but one of the two parties must address them. The following are serious concerns a professional inspection could surface: 

• Structural damage

• Electrical problems 

• Roofing issues 

• The presence of pests, like termites 

• Safety hazards

• HVAC problems 

• Plumbing issues

• Damage to the foundation

• Water damage and mold

It’s also worth determining if any repairs are required. Required repairs are stipulated by local laws or lenders who want issues corrected before extending a mortgage to the home buyer. 

3. Analyze costs 

Some issues that arise in an inspection aren’t pressing; others aren’t expensive to fix. Even if you’re a home seller planning on negotiating with an interested buyer around more serious repairs, you can still tackle some of the small, inexpensive stuff. These repairs fall in the category of recommendations and might include repainting, fixing tiles, or refinishing floors. Making a few impactful updates can help the home look more attractive to a buyer and even boost the property’s value. 

To gain clarity around the cost of more significant repairs and decide whether to perform them, you’ll need to meet with contractors and get quotes. Home inspectors do an excellent job of identifying a property’s issues, but their role isn’t to provide cost estimates. You must get these directly from the folks who’d do the work. Keep in mind that not all contractors give free estimates, so expect to invest a bit in acquiring formal price quotes.

4. Analyze the value-add

Making certain repairs and cosmetic upgrades (the latter of which aren’t necessarily on a home inspection report) can boost the value of your home. And if the value will skyrocket after you make these home improvements, you may want to think twice about selling as-is or over-negotiating with the buyer. 

Leverage your contractor bids together with cost versus value lists, which help homeowners project the return on their investment should they do certain upgrades and repairs. This way, you can analyze whether you’ll earn substantially more on your sale if you pump the brakes and do repairs before hitting the market. For example, replacing a garage door drives a nearly 200 percent return, and if you were to make this repair, you stand to earn significantly more on the sale. 

5. Decide what you want

A higher sale price or savings on repairs? That is the question for anyone selling a home with known issues. If you decide not to perform repairs, you’ll want to offer the buyer a credit. A credit helps mitigate closing costs for the buyer, and they, in turn, assume the expense of repairs. 

As a seller, offering a credit can help you make a quicker sale. After all, you don’t have to wait to complete repairs before the property changes hands. And you’re not beholden to the buyer’s approval of those repairs. Explaining to the buyer that, with a credit, they’ll be able to make repairs on their schedule, to their liking, and with the contractors of their choosing can be a selling point.

6. Negotiate 

Let’s face it: some buyers won’t even look twice at a home that needs repairs. If you’re having trouble getting a buyer to the negotiating table in the first place, this can be a red flag—a strong indicator that you must do some renovations to make the property a more attractive purchase. This point can be especially true if outstanding repairs are required by your local laws or a potential buyer’s lender. No buyer hoping to get a mortgage will seriously consider a home their lender won’t write a loan for—unless the buyer has expressed a commitment to making essential repairs on their own. Buyers making cash offers won’t encounter this blocker. 

An amicable negotiation around repairs requires both the buyer and seller to approach it with an open mind. A buyer should remember that the seller has just been hit with some unexpected news about the state of their home and is trying to react in real-time with solutions. A seller should be reasonable about the fact that most buyers don’t want a money pit and splitting repairs or offering credit can sweeten the deal. If selling in a buyers’ market, this final point gains even more strength. A buyer needs a good enough incentive to choose a home needing repairs over many other attractive options on the market. In a seller’s market, you might have more luck selling a home that comes with a list of repairs.

7. Give your final word 

Sellers aren’t obligated to make repairs (unless their local laws or the buyer’s mortgage lender requires it). Ultimately, if a seller opts out, the buyer has to consider whether the home purchase is worth it. Ideally, there’s been a negotiation—a conversation around what’s fair, so when the seller gives their final word on what repairs they’re willing (or not) to do, it shouldn’t come as a surprise to the buyer. 

So, if you’re a home seller, what’s a reasonable final word? An honest one that reflects your circumstances. If you can’t come up with the funds for major repairs, you may not have another option but credit the buyer so they can complete them. Or, if you’re on a strict schedule and must move your property quickly, you may not have enough time to make extensive repairs. 

Your realtor can help you navigate home inspection repairs

Partner with a Titus-affiliated realtor and have someone in your corner throughout the sale process—including when it comes time to decide which home repairs to make or negotiate pricing with a buyer.

Plus, when you team up with a Titus partner agent, you gain access to a unique financing option for home improvements. Titus’s closing lines of credit (CLoCs) provide home sellers with a zero-interest loan for repairs. Learn how it works here.