Home Inspection: Negotiation, Round 2

Dear Pat,
When we sold our house the buyers offered a little over the listed price, and asked for 3 days to do an inspection with a home inspection service. After the inspection the buyers said they would only go ahead with the deal if we repaired a long list of items the inspector found, and if we agreed to lower our price by $2000! Is this usual? I’m burned about this. I thought a deal was a deal, but now I feel like we’re having our pockets picked.
---Old School

Dear Old School,
Welcome to the modern real estate world, wherein the buyer gets to negotiate twice for your house. Since most purchase agreements are written with an inspection contingency nowadays, you often must wait until the buyer signs off after the home is inspected for the sale to be final. This can require a seller’s work list or price reduction, or both. You were caught by surprise, Old School, but many Realtors prepare their sellers in advance for the likelihood of this “second negotiation.” Home inspectors are looking for problem conditions ranging from nuisance to hazardous, and for components that may be at the end of their useful life. For instance, if your roof is fine but is nearing 20 years old, the inspector could tell the buyers that they may need a new roof soon (ka-ching!). The same applies to forced air furnaces over 20 years old, or a 10-year-old water heater (ka-ching, ka-ching!). Roof leaks, plumbing leaks, hazardous wiring—all will probably need to be corrected for the buyer, or adjusted in the price.

The more you know about your own house before sale, the better able you’ll be to negotiate this second round. It’s not uncommon for sellers in other parts of the country to get home inspections prior to going on the market. Often the full inspection report is available to any prospective buyer, as an effective means of eliminating any surprise objections at a critical point in negotiations. I’m not aware of this practice in our local market, but it makes sense to move in the direction of full disclosure at the outset. Provided, of course, that all parties are satisfied with the inspector’s objectivity and competence. As a buyer, I’d probably want my own inspection anyway.

But what about your hard feelings, Old School? Unfortunately, I’ve seen many situations change from love fest to bitter stalemate as the gloves come off for the post-inspection negotiation. Much depends on the Realtors’ “people” skills as well as the parties’ willingness to look at the larger picture. Buyers (especially first-time buyers) who may have paid over the asking price are staggered by the maintenance and repair responsibilities they face, both real and imagined. Sellers who know and love their home are often offended as a lengthy list of flaws is suddenly thrown at them. I’ve found that a little “give” on both sides during this second negotiation helps avoid hard feelings and the desire for revenge, thus creating the goodwill needed to bring the transaction to a successful closing.