Monday, June 21, 2010

Priorities to Consider When Negotiating Repairs (For Buyers)

I always stress the importance for Buyers to attend the inspection of a home they plan to purchase. Doing so enables them to be shown specific items of importance and allows them to ask questions of the inspector. The following information is coming straight from the horse's mouth (so-to-speak), a REAL inspector...and a very thorough one I might add. Please read on....

In the words of Glenn Wharten, Texas Inspection Partners: It happens during nearly every inspection. The buyer will ask me if the seller “has to” repair a particular item or they will ask which items they should ask the seller to repair. Repair negotiations are of course, the responsibility of the buyer’s agent. The agent however, is not supposed to be making value judgments in regard to repairs. It therefore falls to the inspector to give every buyer some level of guidance as to how to set priorities among all of the items found.

I first advise buyers that much of the repair negotiation process rests on the seller’s attitude towards the process. If the seller believes he “took a bath” or is financially stressed, he may have little interest in conducting repairs. At the other end of the spectrum is the seller that thinks he did well during initial negotiations or earnestly wants to leave the home in a tidy manner. The normal scenario tends to be somewhere in the middle of these extremes.

To prepare for repair negotiations you need to accept two facts. First, a seller will not repair the entire list. The simple explanation that I use is that you have to accept that there is a normal level of wear and tear on any home. Secondly, the buyer must make a serious decision about what he is unwilling to accept and what he can do himself. Homeownership is a responsibility; it comes with an obligation to conduct upkeep. Items found by the inspector that fall into the normal upkeep category are poor choices for repair negotiations.

Finally, consideration must be given to the buyer’s personal situation. Factor in buyer skill set, the age of the new occupants and any mobility issues with the new occupants. Priorities 1 through 3 (below) can routinely become part of a negotiating process, while 4 normally does not. This is what I give to my buyers:

Priority 1: Safety - Repair any item that can be construed as harmful if not fixed. Opinions on what is a safety issue will vary. Good examples include GFCI repair or the replacement of a copper gas line.

Priority 2: Structure - Repair any item, which causes a weakening of the structure or opens the structure up to environmental damage. Rotted wood, plumbing leaks or ineffective flashing.

Priority 3. Mechanicals - Repair any mechanical or appliance needed for home comfort or functionality. AC or heat, which is not working.

Priority 4. Routine Repairs - Items that are part of a normal maintenance program but need attention now. Caulk repair around windows, trimming vegetation.

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